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Research Policy and Compliance  /  Export Compliance  /  National Defense Authorization Act Section 889 (NDAA 889)

National Defense Authorization Act Section 889 (NDAA 889)

Section 889 of the John S. McCain National Defense Authorization Act prohibits government contractors from providing the federal government with telecommunications or video surveillance equipment, systems, or services (or an essential component thereof) produced or provided by five Chinese companies and their subsidiaries and affiliates. Separately, Section 889 prohibits government contractors from using these prohibited items or services, regardless of whether they are used in the performance of work under a federal contract. The prohibited Chinese companies are listed here:

China

  1. Huawei Technologies Company
  2. ZTE Corporation
  3. Hytera Communications Corporation
  4. Hangzhou Hikvision Digital Technology Company
  5. Dahua Technology Company

In addition to these companies (and their subsidiaries and affiliates), Section 889 also applies to entities that the Secretary of Defense designates as entities "owned or controlled by, or otherwise connected to, the government of a covered foreign country." All the prohibited companies can be found on the updated list here.

Additional supply chain entities of concern can also be found here: www.fcc.gov/supplychain/coveredlist

Any Caltech employee with information related to an actual or potential violation of Section 889 by Caltech, a Caltech employee, or a subrecipient or subcontractor at any tier must report any concerns to Caltech ASIC hotline or the Senior Director for Research Administration or the Office of General Counsel. Caltech will not tolerate retaliation against anyone who raises a concern honestly and in good faith.

"Covered telecommunications equipment or service"—includes those telecommunications and video surveillance equipment or services produced by:

  • Huawei Technologies Company, ZTE Corporation, Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, Dahua Technology Company, and any subsidiaries or affiliates;
  • Any other entities that the Secretary of Defense designates as being owned or controlled by China; and
  • Any entities marked as excluded on www.sam.gov.

"Equipment"—refers to "tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-Federal entity for financial statement purposes, or $5,000."[1]

"Substantial or essential component"—means "any component necessary for the proper function or performance of a piece of equipment, system, or service."

"Subrecipient"—refers to a usually non-Federal entity "that receives a subaward from a pass-through entity to carry out part of a Federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a Federal awarding agency."[2]

"Subsidiaries or affiliates"—Caltech has compiled a list of entities that produce or manufacture covered telecommunications and/or video surveillance equipment and services, which is found here. Caltech employees must also use the SAM search function to verify an entity's status before contracting with the entity.

[1] 2 C.F.R. §200.1 (2020).

[2] Id.

Where to go for help?

For specific questions or contact information, please refer to the following contact list:

Contacts:

Procurement Services questions: https://procurement.caltech.edu/

Caltech Export Compliance Office for export issues: exportcompliance@caltech.edu

Research Administration for award-specific questions: david.mayo@caltech.edu

Resources:


Federal Register Notices

Federal Award Terms

Agency-Specific Guidance