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This is a channel that we use to keep members in the loop about the latest policy documents and developments. Our work in advocacy cuts across all areas of expertise and impacts all of our members.

Our Director of Government Affairs & Advocacy, Cynthia Smith, and our Advocacy Manager, Jenna Thoretz, post regular updates so our members are alerted to changes in the sector as they happen. We encourage everyone who joins Connect to become part of this community and to keep up to date with the information shared here. Posts to this community go live on our website, and you may wish to use the anonymous posting option if you have a question to ask here.

New OMB Final Guidance on 2 CFR related to Section 889 of NDAA FY19

  • 1.  New OMB Final Guidance on 2 CFR related to Section 889 of NDAA FY19

    Posted 08-11-2020 12:10
    Summary language excerpted from pg 4 of final guidance just issued by OMB on 2 CFR relevant to Section 889 of NDAA FY19

    II. Meeting Statutory Requirements and Aligning 2 CFR with Other Authoritative

    Source Requirements
    A. Prohibition on certain telecommunication and video surveillance services or equipment
    OMB revised 2 CFR to align with section 889 of the NDAA for FY 2019 (NDAA 2019). The
    NDAA 2019 prohibits the head of an executive agency from obligating or expending loan or
    grant funds to procure or obtain, extend or renew a contract to procure or obtain, or enter into a
    contract (or extend or renew a contract) to procure or obtain the equipment, services, or systems
    prohibited systems as identified in NDAA 2019. To implement this requirement, OMB is adding
    a new section, 2 CFR 200.216 Prohibition on certain telecommunication and video surveillance
    services or equipment, which prohibit Federal award recipients from using government funds to
    enter into contracts (or extend or renew contracts) with entities that use covered
    telecommunications equipment or services. This prohibition applies even if the contract is not
    intended to procure or obtain, any equipment, system, or service that uses covered
    telecommunications equipment or services. As described in section 889 of the NDAA 2019,
    covered telecommunications equipment or services includes:
     Telecommunications equipment produced by Huawei Technologies Company
    or ZTE Corporation (or any subsidiary or affiliate of such entities).
     For the purpose of public safety, security of government facilities, physical
    security surveillance of critical infrastructure, and other national security
    purposes, video surveillance and telecommunications equipment produced by
    Hytera Communications Corporation, Hangzhou Hikvision Digital
    Technology Company, or Dahua Technology Company (or any subsidiary or
    affiliate of such entities).
     Telecommunications or video surveillance services provided by such entities
    or using such equipment.
     Telecommunications or video surveillance equipment or services produced or
    provided by an entity that the Secretary of Defense, in consultation with the
    Director of the National Intelligence or the Director of the Federal Bureau of
    Investigation, reasonably believes to be an entity owned or controlled by, or
    otherwise connected to, the government of a covered foreign country.
    200.216 Prohibition on certain telecommunication and video surveillance services or
    equipment
    Commenters expressed widespread concerns on the impact and implementation of the
    statutory requirement. OMB sought to address commenter concerns by re-writing this section
    to align closely with the law, add a new definition for telecommunications and video
    surveillance costs, and add a new section 2 CFR 200.471. The final language provides
    guidance describing the meaning of covered telecommunications as explained in the statute.
    The language also aligns with the requirements in the statute affecting the financial
    assistance community to include the prohibition of non-Federal entities from obligating or
    expending loan or grant funds to (1) procure or obtain, (2) extend or renew a contract to
    procure or obtain, or (3) enter into a contract (or extend or renew a contract) to procure or
    obtain, equipment, services, or systems that uses covered telecommunications equipment or
    services as a substantial or essential component of any system, or as a critical technology as
    part of any system.
    Federal awarding agencies are also required by the law to work with OMB to prioritize
    available funding and technical support to assist affected businesses, institutions and
    organizations. In addition, the funds must be prioritized as reasonably necessary for affected
    entities to transition from covered communications equipment and services, to procure
    replacement equipment and services, and to ensure that communications service to users and
    customers is sustained. Further, OMB added a new 2 CFR 200.471 Telecommunication and
    video surveillance costs to provide clarity that the telecommunications and video surveillance
    costs associated with 2 CFR 200.216 are unallowable. A new definition for
    telecommunication and video surveillance costs, which is described in 2 CFR 200.471, has
    also been added to 2 CFR for clarity.

    ------------------------------
    Cynthia Smith
    Senior Advisor, Government Affairs & Regulatory Compliance
    Humentum
    cynthia.smith@humentum.org
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