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The application of the Part B legislation means that entities have to consider the entire enterprise in eliminating Section 889 exposure.
Effective August 13, 2020, the Federal Acquisition Regulation (FAR) Council published an interim rule implementing Part B to the Section 889(a)(1) regulation of the 2019 National Defense Authorization Act (NDAA). The Part B interim rule widely expanded Prohibition Part A’s Government contract-specific ban to include contracting with any entity, even for non-Government contract purposes, that uses covered telecommunications equipment or services. As such, the application of the Part B legislation means that entities have to consider the entire enterprise in eliminating Section 889 exposure, thereby broadening the implications and compliance oversight needs to include commercial elements of the business.
Download the full article on: Building confidence in your organization’s Section 889 Part B compliance program
What critical activities should contractors undertake in establishing and maturing a Section 889 compliance program?
1 | Design and implement an entity-level policy and procedural document listing the steps to take to address Section 889 procurement monitoring and reporting requirements. |
| Verify subcontractor compliance through clause flowdowns, annual representations and certifications, and periodic subcontractor assessments of compliance. |
| Take a proactive approach to enhance requirement awareness enterprise-wide. This is achieved by receiving buy-in from key stakeholders, including upper management, legal, supply chain, contracts and information technology. |
| Implement a Section 889 steering committee that drives key compliance and business operation initiatives. |
| Prepare a compliance plan that achieves the reasonable inquiry standard on an annual basis.¹ |
Summary
A government contractor could be disqualified from bidding on a government contract if any part of its entity, even the commercial business, has prohibited telecommunications equipment as a substantial or essential component of any system, or as critical technology as part of any system.
How EY can help
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EY Government Contract Services provides government contracting consulting, government contract accounting and pharmaceutical government pricing support.
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