Defense Firms Unlikely to Win Extension to Purge Banned Chinese Tech

House Armed Services Committee Chairman Adam Smith, D-Wash., proposes requiring the Government Accountability Office complete a report on federal agencies’ procurement of equipment from certain Chinese companies, or entities using such equipment, which was blacklisted in the National Defense Authorization Act of 2019.

The NDAA currently under development for 2021 should require “a GAO report on the implementation of section 889 of the FY19 NDAA,” reads a recently released summary of the chairman’s proposed legislation. 

The chairman’s mark also calls for a series of oversight mechanisms for the acquisitions process in general, including a thorough report to Congress on the Pentagon’s Cybersecurity Maturity Model Certification program.

Section 889 of the 2019 NDAA—which is set to take effect Aug. 13—is a pain point for many federal contractors. Some trade associations have written to House and Senate Armed Services leaders asking for a six-month extension for complying with the law. And in congressional testimony earlier this month, Ellen Lord, the undersecretary of Defense for Acquisition and Sustainment, also raised concerns it would have “unintended consequences” for the defense industrial base. 

"The thought that somebody in six or seven levels down in the supply chain could have one camera in a parking lot, and that would invalidate one of our major primes being able to do business with us gives us a bit of pause," Lord said, referring to the provision which governs the use of surveillance and telecommunications equipment thought to present risks to national security.

But Congress seems united on the need to ensure that implementation of the law is in place, rather than delayed, especially given fear China will overtake the U.S. as the great powers race to develop emerging technologies. 

“From my understanding, broadly, beyond watching the bill, it doesn’t look like they’re going to get the extension on the 889 deadline,” a former Hill staffer who tracks tech industry issues told Nextgov.

The text of the Senate’s version of the fiscal 2021 NDAA—now awaiting floor votes along with 641 proposed amendments—says, “The Secretary of Defense shall establish, enforce, and track actions being taken to protect defense-sensitive United States intellectual property, technology, and other data and information, including hardware and software, from acquisition by the Government of the People's Republic of China.”

Other items in the chairman’s mark suggesting areas of likely agreement with the Senate include a need for oversight of the implementation of the CMMC, and a prioritization of artificial intelligence. 

“There’s a couple of areas, and AI generally and the [Joint Artificial Intelligence Center] specifically are clearly areas where both the House and Senate are in agreement that we need to step up our efforts,” the former staffer said.

In this vein, Smith proposed granting authority to the JAIC director “for the development, acquisition, and sustainment of AI technologies services and capabilities through fiscal year 2025.” The chairman’s legislation would establish an acquisition executive under the director who would be responsible for “rapidly delivering acquisition solutions to meet validated artificial intelligence requirements.”

Smith’s proposal also includes a number of acquisition oversight mechanisms, including that the law should clarify the application of whistleblower rights for those who disclose information regarding “gross mismanagement of a Federal contract or grant or an abuse of authority relating to a Federal contract or grant.”

The House Armed Services Committee will markup the 2021 NDAA on Wednesday when the full picture of the legislation—including various subcommittee versions—will come into view.