Covered Telecommunications Equipment: Bans, Compliance, and Waivers

Covered telecommunications equipment is hardware, software, or services from specific foreign entities that federal agencies, their contractors, subcontractors, and grant recipients are prohibited from buying or using. The prohibition comes from Section 889 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019, and it works in two stages: agencies cannot buy the equipment directly, and they cannot do business with any organization that uses it anywhere in its operations. The list of restricted products started with five Chinese manufacturers and has since grown to include Russian security software, Chinese state-owned telecom carriers, foreign-made uncrewed aircraft systems, and foreign-made routers.

What Falls Within the Definition

The Federal Acquisition Regulation defines covered telecommunications equipment or services in four categories. The first is telecommunications equipment from named prohibited entities. The second is video surveillance and telecommunications equipment from certain named entities when used for public safety, security of government facilities, physical security surveillance of critical infrastructure, or other national security purposes. The third covers telecommunications or video surveillance services provided by those entities or that rely on their equipment. The fourth is equipment or services from any entity the Secretary of Defense reasonably believes is owned by, controlled by, or connected to the government of a covered foreign country, after consulting with the Director of National Intelligence or the FBI Director.¹

The definition reaches past standalone devices. Any system that uses covered equipment as a substantial or essential component, or as critical technology within a larger system, is itself treated as covered.² A network built on compliant routers but managed through a service tied to a prohibited entity is still covered.

The Companies and Products on the List

Section 889 names five Chinese companies. Huawei Technologies Company and ZTE Corporation face the broadest restriction, which reaches all of their telecommunications equipment. Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, and Dahua Technology Company face a narrower ban on video surveillance and telecommunications equipment used for public safety, government security, critical infrastructure monitoring, and national security purposes.³ The ban covers every subsidiary and affiliate of these companies, regardless of brand or corporate structure.

The FCC maintains a related Covered List under the Secure Networks Act, and it has expanded. As of March 2026, the list adds:⁴

AO Kaspersky Lab and Kaspersky Lab, Inc. information security products, cybersecurity and anti-virus software, and equipment with integrated Kaspersky software.
China Mobile International USA Inc. international telecommunications services.
China Telecom (Americas) Corp. telecommunications services.
Pacific Networks Corp and ComNet (USA) LLC international telecommunications services.
China Unicom (Americas) Operations Limited international telecommunications services.
Uncrewed aircraft systems and UAS critical components produced in a foreign country, added December 2025, with limited exceptions for systems on the Defense Contract Management Agency’s Blue UAS Cleared List through January 1, 2027.
Routers produced in a foreign country, added March 2026, subject to specific conditional approval exceptions.

Because the fourth FAR category gives the Secretary of Defense standing authority to flag additional entities, checking only against the original five names misses much of the picture.¹

The Two Layers of the Ban

Section 889 has two parts, and they cause different problems.

Part A, at Section 889(a)(1)(A), prohibits the federal government from directly buying covered equipment or services. It has been in effect since August 13, 2019. If the procurement itself would bring in covered equipment, the contract cannot proceed.²

Part B, at Section 889(a)(1)(B), is broader and drives most compliance concerns. It bars agencies from contracting with any entity that uses covered equipment or services anywhere in its operations, not just on the federal contract. Part B took effect August 13, 2020.² A company can lose federal contract eligibility because of a Hikvision camera in a break room or a ZTE router at a satellite office that has nothing to do with the government work.

Who Has to Comply

All executive agencies are prohibited from procuring covered equipment or contracting with entities that use it. The ban applies to new contracts and to extensions or renewals of existing ones.²

Federal contractors must comply even when providing commercial off-the-shelf products, and the prohibition clause at FAR 52.204-25 flows down into all subcontracts, including subcontracts for commercial products and services.⁵ A prime cannot insulate itself by pushing work to a subcontractor that uses covered equipment.

Organizations that receive federal grants or loans face the same prohibition under 2 CFR 200.216. Recipients and subrecipients cannot use grant or loan funds to procure covered equipment or services, enter new contracts for them, or extend existing contracts. Acceptance of the grant or loan itself serves as a certification of compliance.⁶ That sweeps in universities, hospitals, state agencies, and nonprofits that would not otherwise think of themselves as subject to defense procurement rules.

Certifying Compliance and What Reasonable Inquiry Means

Before winning a federal contract, an offeror represents whether it provides or uses covered equipment. FAR 52.204-26 asks the yes-or-no question, and FAR 52.204-24 requires detailed disclosures when the answer is yes: the producing entity, unique entity identifier and CAGE code, brand and model, item description, and the proposed use, along with any factors relevant to a possible exception.⁷ Reps are completed annually through the System for Award Management at SAM.gov.⁸

How deeply must you look into your own supply chain before signing that representation? The FAR calls the standard a “reasonable inquiry,” which it defines as an inquiry designed to uncover any information in your possession about the identity of the producer or provider of covered equipment or services, but one that does not require an internal or third-party audit.⁹ In practice, check your records, ask your suppliers, and review your IT inventory. You do not have to hire an outside auditor, but “we didn’t look” is not a defense.

What to Do If You Find Covered Equipment

When a contractor discovers covered equipment during contract performance, the clock is short. Within one business day of discovery, the contractor must notify the contracting officer with an initial report that includes the contract number and any order numbers, the supplier’s name, the supplier’s unique entity identifier and CAGE code if known, the brand and model, an item description, and any readily available information about mitigation already taken or recommended.⁵

Within ten business days of that initial report, the contractor must submit a follow-up with any additional mitigation information, a description of the efforts it took to prevent use of covered equipment in the first place, and any additional steps it will take going forward.⁵ The one-business-day clock starts at discovery, not when management gets around to reviewing the finding.

Waivers

The prohibition is not absolute. The head of an executive agency may grant a one-time waiver for a specific government entity, but the requesting official must submit a compelling justification, a complete description of where covered equipment or services exist in the relevant supply chain, and a phase-out plan. Part B waivers add prerequisites, including designation of a senior official for supply chain risk management, participation in the Federal Acquisition Security Council information-sharing environment, at least 15 days’ notice to ODNI and the FASC, and a report to the appropriate congressional committees within 30 days of approval. The Director of National Intelligence separately holds authority to grant waivers when doing so serves U.S. national security interests.¹⁰

Consequences of Getting It Wrong

The most immediate consequence is losing federal contracts. An agency that discovers a contractor is using covered equipment can terminate the contract, and a contractor that cannot truthfully complete the SAM.gov representation is effectively locked out of future awards.

The more serious risk is False Claims Act liability. The representations are certifications to the federal government, and a contractor that falsely certifies it does not use covered equipment, whether through deliberate deception or reckless disregard for the truth, faces civil penalties between $14,308 and $28,619 per violation, plus three times the damages the government sustains.¹¹ Per-violation penalties add up quickly across multiple certifications and contracts. Private whistleblowers can also bring these claims on the government’s behalf through qui tam actions, which puts enforcement in the hands of employees and competitors as well as agencies.

Contractors found in violation may also face suspension or debarment from federal contracting. For organizations whose revenue depends on government work, that outcome is existential, and treating the reasonable inquiry as a box-checking exercise is one of the more expensive shortcuts in federal contracting.

1
Acquisition.GOV. Subpart 4.21 Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment
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Acquisition.GOV. Section 889 Policies
3
Federal Register. Federal Acquisition Regulation: Prohibition on Contracting With Entities Using Certain Telecommunications and Video Surveillance Services or Equipment
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Federal Communications Commission. List of Equipment and Services Covered By Section 2 of The Secure Networks Act
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Acquisition.GOV. 48 CFR 52.204-25 – Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment
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eCFR. 2 CFR 200.216 – Prohibition on Certain Telecommunications and Video Surveillance Equipment or Services
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Acquisition.GOV. 48 CFR 52.204-24 – Representation Regarding Certain Telecommunications and Video Surveillance Services or Equipment
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Acquisition.GOV. Subpart 4.12 – Representations and Certifications
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General Services Administration. GSA Implementation of Section 889 Frequently Asked Questions
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Acquisition.GOV. 4.2104 Waivers
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Federal Register. Civil Monetary Penalties Inflation Adjustments for 2025