Prohibition on Covered Telecommunications Equipment (Section 889) Compliance

5 Banned Entities. Hundreds of Subsidiaries. Does Your Supply Chain Pass the Reasonable Inquiry?

Section 889 compliance requires every federal contractor to certify—before every contract award—that no covered telecommunications equipment or services exist anywhere in their organization. Part B extends the ban beyond government work: if your company uses prohibited equipment for any purpose, you cannot hold a federal contract. False certifications trigger False Claims Act liability. Certivo automates Section 889 supply chain screening from supplier declarations to SAM.gov-ready representations.

Key Statistics

• 5+ Prohibited entities (plus all subsidiaries and affiliates) screened continuously
• 99.2% Entity screening accuracy from supplier declarations
• 95% Supplier response rate with CORA-powered campaigns

Regulation Overview

• Jurisdiction: United States — all federal contracts, grants, and cooperative agreements
• Regulatory Body: Federal Acquisition Regulatory Council (DoD, GSA, NASA); enforced by contracting officers and agency Inspectors General
• Regulation Number: Section 889, John S. McCain NDAA for FY2019 (Pub. L. 115-232); FAR 52.204-24, 52.204-25, 52.204-26
• Effective Date: Part A: August 13, 2019 (procurement ban); Part B: August 13, 2020 (use ban)
• Official Source: Acquisition.gov
• Key Threshold: Any use of covered equipment as a substantial or essential component of any system

What is Section 889?

Section 889 of the FY2019 NDAA is the U.S. government's primary supply chain security regulation targeting covered telecommunications and video surveillance equipment produced by entities linked to the People's Republic of China. For supply chain and procurement teams, the obligation is absolute: identify and eliminate all covered equipment across your entire corporate footprint. The regulation names five entities—Huawei Technologies, ZTE Corporation, Hytera Communications, Hangzhou Hikvision Digital Technology, and Dahua Technology—plus all subsidiaries and affiliates. Part A prohibits the government from procuring covered equipment. Part B prohibits contracting with any entity that uses covered equipment anywhere in its operations, regardless of whether that use relates to federal work. Section 889 compliance requires component-level supply chain visibility into telecommunications and video surveillance infrastructure. Contractors must conduct a "reasonable inquiry," represent their compliance status in SAM.gov, and report discoveries of covered equipment within one business day. The prohibition flows down to every subcontractor tier.

Key Components / Sub-Frameworks

• Obligation: Federal agencies cannot procure covered telecom equipment or services
  Part A — 889(a)(1)(A): Government procurement ban
• Obligation: Agencies cannot contract with entities that use covered equipment anywhere
  Part B — 889(a)(1)(B): Contractor use ban
• Obligation: Offeror certifies covered equipment status with every offer
  FAR 52.204-24: Representation provision
• Obligation: Requires disclosure within 1 business day of discovering covered equipment
  FAR 52.204-25: Contract clause — prohibition and reporting
• Obligation: Annual SAM.gov representation of compliance status
  FAR 52.204-26: Covered telecommunications representation
• Obligation: Extends Section 889 prohibitions to all federal grant recipients
  2 CFR §200.216: Grant and cooperative agreement extension

Key Compliance Requirements

Who Must Comply

• All federal contractors holding or bidding on U.S. government contracts
• Subcontractors at every tier performing under federal prime contracts
• Federal grant and cooperative agreement recipients (including universities and research institutions)
• GSA Multiple Award Schedule (MAS) contract holders
• Companies using the Governmentwide Commercial Purchase Card for federal purchases
• Non-U.S. companies supplying into U.S. federal supply chains

Key Thresholds

• Any use: No de minimis exception—any use of covered equipment as a substantial or essential component triggers the ban
• 1 business day: Maximum time to report discovery of covered equipment during contract performance
• Annual: Frequency of required SAM.gov representation updates
• All tiers: Prohibition flows down to every subcontractor level

Core Obligations

1. Reasonable Inquiry
   Conduct supply chain review to determine presence of covered telecommunications equipment or services
   DEADLINE: Before every offer or contract renewal
2. SAM.gov Representation
   Certify compliance status via FAR 52.204-26 representation in System for Award Management
   DEADLINE: Annual update; with every new offer
3. Disclosure & Reporting
   Report discovery of covered equipment to contracting officer with equipment details and mitigation plan
   DEADLINE: Within 1 business day of discovery
4. Subcontractor Flowdown
   Include FAR 52.204-25 prohibition clause in all subcontracts
   DEADLINE: At time of subcontract award
5. Phase-Out Plan
   If waiver is sought, submit complete supply chain laydown and elimination timeline
   DEADLINE: With waiver application to agency

Frequently Asked Questions

What companies and organizations are subject to Section 889 compliance obligations?
Every entity holding, bidding on, or performing under a U.S. federal contract, subcontract, grant, or cooperative agreement must comply. This includes prime contractors, subcontractors at all tiers, GSA schedule holders, federal grant recipients including universities and research institutions, and any entity using a Governmentwide Commercial Purchase Card. Non-U.S. companies participating in federal supply chains are also subject to the prohibition.

What are the penalties for Section 889 non-compliance?
Non-compliance consequences are severe. Contractors face contract loss, termination for cause, suspension, or debarment from future federal contracting. False certifications trigger False Claims Act liability with penalties including treble damages and per-claim fines. Contracting officers may reject offers outright based on adverse representations.

How does Certivo support the "reasonable inquiry" process required by FAR 52.204-24?
CORA launches automated supplier declaration campaigns requesting telecommunications and video surveillance equipment details across your supply chain. Each declaration is screened against all five prohibited entities and known subsidiaries. Results are compiled into a documented reasonable inquiry package with full evidence traceability—ready for contracting officer review within hours, not weeks.

What equipment declaration formats does Certivo accept from suppliers and facility managers?
Certivo accepts any format: PDF equipment inventories, Excel manifests, freeform attestations, photographs with metadata, and structured compliance declarations. CORA extracts manufacturer names, model numbers, and corporate ownership data regardless of format or language, eliminating the need to standardize responses across a global supplier base.