New Restrictions on Government Freight Forthcoming

In order to combat the national security and intellectual property threats that face the United States, Section 889(a)(1)(a) of the John S. McCain National Defense Authorization Act (NDAA) for Fiscal Year 2019, prohibits the Federal Government from procuring or obtaining or extending or renewing a contract to procure or obtain, “any equipment system, or service that uses covered telecommunications equipment or serves as a substantial or essential component of any system, or as critical technology as part of any system.”  This will include 3PLs, who have contracts with the Federal Government and the motor carriers they utilize to haul the Government’s freight. This rule goes into effect on August 13, 2020.  

Section 889 is divided into two parts, while section A is important it is not germane to our members.

  • Section A: prohibits the direct sale or acquisition of product or service to the federal government that contains a covered technology.

Section B: prohibits any company or individual who enters into a contract or uses a sub-contract to provide a service or product to the Federal government, from using covered technology.

The term covered technology in this context refers to malicious, state-owned tech companies, the following companies are banned:

Covered entities mean any of the following:

(A) Telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities).

(B) 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).

(C) 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.

if you do contract work for the government, including hiring subcontract motor carriers, you must stay in compliance with section 889 (b). You must ensure your company and the motor carriers that you subcontract with do not utilize any the above covered technology companies. The date this goes into effect is August 13, 2020.

TIA will remain on top of this issue and the impacts to the 3PL industry. TIA awaits language from the General Services Administration (GSA) Transportation Freight Management as they plan to release similar language that centers around the tender system that brokers and motor carriers utilize.

If you have any questions, please contact TIA Advocacy ([email protected]).

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