Section 889 Compliance: Reps & Flow-Down

Last verified 2026-08-16 against acquisition.gov (FAR 52.204-24, 52.204-25, 52.204-26) and law.cornell.edu’s eCFR mirror (2 CFR 200.216, 200.332).

Section 889 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (Public Law 115-232, enacted August 13, 2018) bans the use of federal procurement and federal financial assistance funds on telecommunications and video surveillance equipment or services from five named Chinese manufacturers. It applies differently depending on whether your institution is holding a federal contract (FAR-based) or a federal grant, cooperative agreement, or loan (2 CFR 200-based) — and the representation, screening, and subaward flow-down mechanics differ between the two tracks. This guide walks through both.

Quick-reference: which rule applies to you

Award type	Governing rule	Who is bound	Representation mechanism
Federal procurement contract	FAR 52.204-25 (prohibition clause) + 52.204-24 / 52.204-26 (representations)	Prime contractor, and every subcontractor at every tier	SAM.gov annual Representations & Certifications, plus solicitation-specific offer representation
Federal grant, cooperative agreement, or loan	2 CFR 200.216 (direct prohibition, Uniform Guidance)	Recipient and every subrecipient	No standalone FAR-style checkbox — institutions typically satisfy it through an internal certification/screening process and the standard terms and conditions the awarding agency attaches to the Notice of Award

What counts as “covered telecommunications equipment or services”

Per 2 CFR § 200.216(b) (which restates the statutory definition from Section 889 of P.L. 115-232), covered telecommunications equipment or services means:

Telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate);
For public-safety, government-facility-security, critical-infrastructure-surveillance, or 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);
Telecommunications or video surveillance services provided by those entities, or using their equipment; or
Equipment or services produced or provided by any entity that the Secretary of Defense, in consultation with the Director of National Intelligence or the Director of the FBI, reasonably believes to be owned or controlled by, or otherwise connected to, the government of the People’s Republic of China.

On the procurement side, FAR 52.204-25 further limits the direct-procurement prohibition (and the related use prohibition) to equipment used as a “substantial or essential component” of a system, or as “critical technology” as part of a system — both terms are defined in the clause itself. A single unrelated component buried deep in a much larger commercial system does not automatically trigger the ban; the analysis is fact-specific, which is exactly why a documented screening step matters more than a gut-check.

See the existing Section 889 dictionary entry for the operational definition and worked examples of what is and isn’t covered equipment.

Track 1: federal procurement contracts (FAR)

The prohibition clause

FAR 52.204-25, “Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment,” is inserted into covered federal contracts and prohibits the contractor from:

Procuring or obtaining covered equipment/services as a substantial or essential component of any system, or as critical technology (effective August 13, 2019 for direct procurement); and
Using such equipment/services as a substantial or essential component of any system, or as critical technology, in performing the contract (effective August 13, 2020).

Representations

Contractors document compliance in two stages:

FAR 52.204-24 — solicitation-stage representation: the offeror states whether it “does or does not provide covered telecommunications equipment or services” as part of what it’s offering to the government.
FAR 52.204-26 — the annual, entity-level representation completed in SAM.gov as part of Representations & Certifications: after conducting a reasonable inquiry, the offeror represents whether it does or does not use covered telecommunications equipment or services, or any equipment/system/service that uses them, anywhere in its own operations (not just in performance of the specific contract).

An institution that only ever holds grants and cooperative agreements — no FAR-based procurement contracts — will not have a 52.204-26 representation to complete; that mechanism is procurement-specific.

Reporting and subcontract flow-down

If a contractor identifies covered equipment or services in use during contract performance — including because a subcontractor at any tier reports it — FAR 52.204-25(d) requires reporting to the Contracting Officer (or, for the Department of Defense, to dibnet.dod.mil) within one business day of the discovery, with a fuller report (product/service identification, manufacturer, and how it was used) due within ten business days.

FAR 52.204-25(e) requires the contractor to insert the substance of the clause — including the flow-down paragraph itself — into every subcontract and other contractual instrument, at every tier, including subcontracts for commercial products or services. This is what makes the prohibition follow the money down the entire contracting chain rather than stopping at the prime.

Track 2: grants, cooperative agreements, and loans (2 CFR 200.216)

2 CFR § 200.216(a) is a direct, self-executing prohibition: recipients and subrecipients “are prohibited from obligating or expending loan or grant funds” to procure or obtain covered telecommunications equipment or services, or to enter, extend, or renew a contract to do so. Because 200.216 sits inside the OMB Uniform Guidance that governs federal financial assistance government-wide, it applies to essentially every federal grant and cooperative agreement without a federal awarding agency needing to separately adopt it — agencies typically restate it as a standard term and condition in the Notice of Award, but the underlying obligation exists independently of that restatement.

Unlike the FAR track, 2 CFR 200.216 does not itself contain a specific 1-business-day/10-business-day reporting clock or a SAM.gov representation checkbox. In practice, institutions manage this obligation operationally:

An internal certification or attestation collected from principal investigators, IT/procurement, and any department acquiring networking, video surveillance, or telecommunications equipment on sponsored funds;
Vendor-side screening against the five named companies and their known subsidiaries/affiliates before a purchase order is issued on grant funds;
Prompt notification to the federal awarding agency if covered equipment or services are discovered in use on an active award, consistent with the general noncompliance-remedies framework at 2 CFR 200.339 (withholding funds, additional conditions, suspension, or termination) even though 200.216 does not prescribe its own separate timeline the way the FAR clause does.

Subaward flow-down

A pass-through entity does not get to keep Section 889 compliance to itself. 2 CFR 200.332 requires a pass-through entity to include, in every subaward, all requirements imposed on the pass-through entity by the federal statute, regulation, or the terms and conditions of the federal award — which includes the 200.216 prohibition. In practice this means:

Subaward agreements should carry the same covered-telecommunications-equipment prohibition language as the prime award, not a watered-down summary of it;
Subrecipients should be asked for the same internal certification the prime institution collects internally, on the same cadence (at subaward setup, and again at any modification that adds significant new equipment purchases);
For FAR-based subcontracts issued under a contract (as opposed to a grant), the flow-down is contractually mandatory under 52.204-25(e), not just good practice under 200.332 — the subcontract must carry the clause’s substance verbatim, including the flow-down paragraph itself, so the obligation keeps propagating to sub-subcontracts.

See the existing Subaward dictionary entry for the general subaward-vs-subcontract distinction that determines which flow-down mechanism applies.

Compliance checklist

Screen before you buy. Before procuring networking equipment, video surveillance systems, or related services on any federal award, check the vendor and manufacturer against the five named companies (Huawei, ZTE, Hytera, Hikvision, Dahua) and their known subsidiaries/affiliates.
Document the representation. For FAR contracts, this is the SAM.gov annual Representations & Certifications (52.204-26) plus the solicitation-specific representation (52.204-24). For grants, this is your institution’s own internal certification process — there is no external portal that does this for you.
Flow it down. Insert equivalent prohibition language into every subaward and subcontract, at every tier, regardless of dollar value. Don’t assume a subrecipient already knows about 200.216 just because your own award terms mention it.
Re-screen on renewal and on new subrecipients. Repeat the check at SAM.gov registration renewal (at least annually) and whenever a new subrecipient or major equipment vendor is added mid-award.
Report promptly if you find a problem. On FAR contracts, follow the 1-business-day / 10-business-day clock in 52.204-25(d). On grants, notify the awarding agency promptly even though 200.216 itself sets no fixed clock — delay increases exposure under the agency’s general noncompliance remedies.

How this differs from SAM.gov exclusions and debarment

Section 889 is a categorical, self-executing prohibition tied to specific named companies and their equipment — it is not the same mechanism as debarment and suspension screening against the SAM.gov Exclusions list. A vendor can be fully “clean” on SAM.gov Exclusions (not debarred, not suspended) and still be a prohibited source under Section 889 because it manufactures covered telecommunications equipment. Screen for both, separately — one does not substitute for the other.

Section 889 compliance also frequently overlaps operationally with export-control and research-security screening, since the same IT-procurement and vendor-onboarding workflows often check both. See the related guides on export control reform and research security and controlled unclassified information (CUI) for adjacent obligations that frequently apply to the same award.

Frequently asked questions

Does Section 889 apply to a subaward under $25,000?

Yes. Unlike some procurement thresholds elsewhere in federal regulation, neither 2 CFR 200.216 nor FAR 52.204-25 sets a dollar floor below which the prohibition doesn’t apply. The obligation follows the funds and the equipment, not the transaction size.

Is a grant recipient required to complete a SAM.gov representation for Section 889?

Not through the same mechanism a FAR contractor uses. FAR 52.204-26’s annual SAM.gov representation is a procurement-specific requirement. A grant-only recipient is still bound by the 2 CFR 200.216 prohibition itself, but satisfies it through its own internal certification and screening process rather than a SAM.gov checkbox — unless that same institution also holds FAR contracts, in which case it completes 52.204-26 for those contracts regardless.

What happens if covered equipment is discovered after an award is already active?

For FAR contracts, the contractor must report to the Contracting Officer within one business day of discovery, with full details due within ten business days (FAR 52.204-25(d)). For grants, 2 CFR 200.216 does not prescribe its own timeline, but prompt notification to the federal awarding agency is expected; failure to disclose and remediate can trigger the general noncompliance remedies available to the agency under 2 CFR Part 200 (withholding payments, additional award conditions, suspension, or termination).

Does Section 889 cover equipment purchased with non-federal matching funds?

2 CFR 200.216(a) prohibits obligating or expending “loan or grant funds” on covered equipment or services. Where an award has a cost-share or matching component, check your specific award’s terms and conditions and consult your sponsored-programs office — this guide does not substitute for a case-specific determination on cost-share treatment.

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