DOD’s Section 889 implementation delay allows contractors extra time to re-evaluate equipment

    govcon business survival covid 19
    The Department of Defense was recently granted a waiver by the Director of National Intelligence to delay implementing Section 889 of the 2019 National Defense Authorization Act until Sept. 30, 2020, from the original effective date of August 13. Section 889 mandates that the Department of Defense not do business with any government contractors whose supply chains contain products from five Chinese companies, most notably Huawei. The ban is a result of an administration assessment that these suppliers present a significant threat to national security. 

    What should contractors do now? 

    Defense contractors should continue to aggressively scrub their supply chains from top to bottom to ascertain whether they utilize any equipment from these soon-to-be-banned companies, and if they do should look to replace them as soon as possible. An inability to self-certify that none of this equipment is being used could preclude a contractor from being able to do business with the Department of Defense as of Oct. 1, 2020. 


    Jeff Shapiro, CPA, Partner


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      Jeffrey Shapiro

      CPA, Partner

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