DOD's China-tech waiver targets high-volume buys, excludes major weapons systems

Most Defense Department acquisition will be temporarily exempt from complying with the government-wide ban on contractors purchasing or owning goods or services from Huawei, ZTE, and other Chinese telecom manufacturers.

Ellen Lord, the Pentagon's chief buyer, said that while DOD supports the "intention" of the ban that went into effect Aug. 13, it would use a nearly two-month reprieve to avoid major interruptions and address contractors' confusion over the interim rule's implementation, reporting, and requirements guidance for Section 889 of the 2018 National Defense Authorization Act. DOD issued initial guidance on the matter in July.

"We fully support the intent of the prohibition and we are working to ensure the prohibition results in the removal of these products from our supply chain," Lord said during an Aug. 20 media briefing, adding the waiver would also help DOD avoid conflicts with end of fiscal year purchase activity and expiring funds.

The Office of the Director of National's Intelligence temporary waiver that expires Sept. 30 excludes weapons systems, and primarily focuses on low-risk, high-volume items such as food, clothing, maintenance services, non-electronic construction materials, among others.

"While the waiver does not cover our major weapon systems, based on FY19 obligations in these areas, the waived items would represent about 73% of the total DOD transactions for the year and about 37% of the dollars," Jessica Maxwell, a DOD spokesperson told FCW via email.

Lord previously told Congress that DOD would like more time to comply with the ban, but said Aug. 20 that she wasn't yet considering an extended waiver, which can last up to two years: "DOD is not seeking a broader waiver request at this time."