This web page covers federal government restrictions on the purchase and use of telecommunications equipment (“covered equipment & services”) made by named companies (“restricted companies”).
The federal government will add restricted companies to the federal System for Award Management (SAM) Exclusion Record. In some cases, there may be an appropriate notation to identify that the restriction is limited to certain products and services. To check whether a particular company is restricted, go to www.sam.gov and use the “Advanced Search – Exclusion” functionality.
The National Defense Authorization Act passed in 2020 restricts the purchase and use of telecommunications equipment from specific restricted companies. These restrictions are applicable to all federal awards and have been incorporated into the Federal Acquisition Regulation (FAR) (52.204-25) for Contracts and the Code of Federal Regulations (CFR) (200.216 & 200.471) for Grants and Cooperative Agreements. A list of FAQs has also been issued by the Office of Management and Budget (OMB).
The language used in the legislation, the OMB FAQs, the FAR, and the CFR is not consistent. In these cases, the UW made a determination on how it will implement the restrictions. For implementation of these restrictions, we have taken the most conservative approach in order to minimize risk to the UW. In addition, our guidance applies to all federal awards, even if the specific federal agency has not modified their regulations or individual awards.
Federal award funds may not be used to pay for, either as a direct or indirect cost, the purchase of covered equipment & services from restricted companies.
Such purchases cannot be charged as an indirect (F&A) cost because the federal government pays indirect costs on its awards (see OMB FAQ #17).
Prior to purchasing an item or service from a vendor or issuing a subaward, the UW must complete due diligence to ensure that the vendor/subrecipient will not charge the UW for any costs that include covered equipment & services from restricted companies.
Due diligence to ensure compliance takes the following forms:
OSP carries out entity level subrecipient monitoring, which includes confirming that an intended subrecipient is not currently debarred, suspended, or otherwise ineligible to receive federal funding. This involves checking the federal System for Award Management (SAM) prior to issuing a subaward. OSP will include necessary federal flow-down terms related to the restriction and use of telecommunications equipment in the subaward, as required by the prime federal funding agency.
It is up to the unit making the purchase or extending/renewing a purchase agreement to ensure that the item or service is not covered equipment or services from a restricted company. The SAM website should be reviewed prior to initiating a purchase. To check whether a particular company is restricted, go to www.sam.gov and use the “Advanced Search – Exclusion” functionality.
As an example, here's a screenshot of the Huawei listing in the “Excluded Entities” section of SAM pertaining to covered telecommunications equipment and services:
See the UW Procurement website for additional information:
This federal restriction is effective as of August 13, 2020. As of this date, there can be no charges on any existing agreements with vendors or subrecipients that use covered equipment & services from restricted companies that are either charged directly to a UW federal award or are included as an indirect cost that is charged to a UW federal award.
Such agreements may not be renewed or extended without taking the restrictions under consideration in the renewal or extension flow-down terms.
If the federal award has no choice but to continue to procure covered equipment & services, a waiver may be requested from the federal sponsor. Please contact email@example.com in this situation. The federal government has made it clear that they are unlikely to grant an exemption from this law and implementing regulations. The OMB FAQs also make it clear that a waiver is not available for federal assistance funding (e.g., grants and cooperative agreements).
Use of any personal equipment that is on the list of covered equipment & services from a restricted company could be considered a violation of the regulation and must not be used for any UW business.
Purchases for covered equipment or services from a restricted company, including payments to vendors and subrecipients, are not subject to these restrictions as long as the purchase is not:
- Charged to a federal award;
- Restricted by a non-federal sponsor or other entity providing the funding;
- Charged as an F&A cost; and
- The UW does not use such restricted equipment or services as a critical component of UW’s technology.