Section 889 / FAR 52.204-25

Section 889 of the FY2019 NDAA, implemented as FAR 52.204-25, prohibits US federal agencies from using or contracting with vendors that use specified Chinese telecom equipment.

What does Section 889 prohibit?

Section 889 of the FY2019 National Defense Authorization Act prohibits federal agencies from procuring or using "covered telecommunications equipment or services" as a substantial or essential component. The named covered entities are Huawei, ZTE, Hytera, Hikvision, and Dahua, plus their subsidiaries and affiliates. Part A (effective August 2019) bans the federal government from using; Part B (effective August 2020) bans contracting with any company that uses such equipment in its own operations.

Why AI vendors care

Part B is the hard one. Any AI vendor selling to a federal agency must certify (FAR 52.204-26 representation) that they do not use covered equipment anywhere in their business — not just on the federal contract. The certification is annual and applies to subsidiaries and affiliates globally. For multinational AI vendors with subsidiaries in China or partnerships with Chinese telecoms, this is a real compliance question, not a checkbox.

Buyer-side checks

If you're buying for a federal agency, the vendor's Part B representation is on file in SAM.gov; verify it before contract. If you're buying for a federal contractor, the flow-down clauses extend Section 889 to your subcontractors. Ask vendors for a written attestation, a waiver if applicable, and their process for monitoring ongoing compliance as they add subsidiaries or partnerships.