FAR 52.204-25 Key Requirements: Reporting Covered Telecom on Federal Jobs
Federal construction projects require strict compliance with national security supply chain statutes. Under Section 889 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (Pub. L. 115-232), the government restricts the use of specific foreign telecommunications and video surveillance equipment. When federal contractors or trade subcontractors uncover covered equipment or services on a project, FAR 52.204-25 establishes exact discovery reporting procedures. Trade subcontractors working on interior fit-outs, low-voltage rough-ins, and security installations must understand how these mandates function to avoid severe contractual disruptions.
Identified Covered Entities and Prohibited Equipment
The clause explicitly defines covered telecommunications equipment or services through specific manufacturers and intended applications:
- Telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation, including any subsidiary or affiliate of these entities.
- Video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate) when used for public safety, security of government facilities, physical security surveillance of critical infrastructure, or other national security purposes.
- Telecommunications or video surveillance services provided by these organizations or using such equipment.
- Equipment or services produced or provided by an entity that the Secretary of Defense, in consultation with the Director of National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes is connected to, owned by, or controlled by the government of The Peopleās Republic of China.
Under Section 889(a)(1)(A), agencies cannot procure or obtain systems using covered items as a substantial or essential component, or as critical technology. Section 889(a)(1)(B) further prohibits entering contracts with entities that use such equipment or services, regardless of whether that use occurs in performance of federal work.
Discovery Triggers on the Jobsite
The reporting mandate takes effect whenever a contractor identifies covered equipment or services during contract performance. A report is required if the equipment functions as a substantial or essential componentāmeaning a component necessary for the proper function or performance of a piece of equipment, system, or serviceāor as critical technology. The duty also triggers whenever a contractor receives notice from a subcontractor at any tier or from any other source. Handling these administrative duties should be accounted for in project oversight and general conditions estimating on federal sites.
Initial Report: The One Business Day Requirement
Speed is critical once covered gear is identified. Contractors must submit an initial written report to the Contracting Officer within one business day from the date of identification or notification. If the contract is with the Department of Defense, the report must be submitted directly through the website at https://dibnet.dod.mil. On indefinite delivery contracts, contractors must notify the Contracting Officer for the overall contract as well as the Contracting Officer for any affected order, or identify both the contract and affected orders on the defense reporting portal.
Under FAR 52.204-25(d)(2)(i), the initial one-business-day submission must include:
- The federal contract number and any applicable order numbers.
- Supplier name, supplier Unique Entity Identifier (if known), and supplier Commercial and Government Entity (CAGE) code (if known).
- The brand and model number (such as the original equipment manufacturer number, manufacturer part number, or wholesaler number).
- A detailed item description.
- Any readily available information about mitigation actions already undertaken or recommended.
Follow-Up Report: The 10 Business Day Requirement
The investigation does not end with the preliminary notice. Within 10 business days of submitting the initial information, the contractor must file a comprehensive follow-up report with the Contracting Officer or via the defense portal. This secondary disclosure requires:
- Any further available information regarding mitigation actions undertaken or recommended.
- A description of the specific efforts the contractor undertook to prevent the use or submission of covered telecommunications equipment or services.
- Additional efforts that will be implemented to prevent future use or submission of covered equipment or services across operations.
Exceptions and the Scope of Reasonable Inquiry
FAR 52.204-25 provides narrow statutory exceptions. Contractors are not prohibited from providing third-party connecting services such as backhaul (intermediate links between core networks and edge subnetworks, wired or wireless), roaming cellular services, or interconnection arrangements. Additionally, the prohibition does not apply to telecommunications equipment that cannot route or redirect user data traffic or permit visibility into user data packets handled by the gear.
Compliance reviews rely on a reasonable inquiry. The regulation defines reasonable inquiry as an inquiry designed to uncover information in the entity's possession about the identity of the producer or provider of covered equipment or services. Crucially, the rule specifies that conducting a reasonable inquiry excludes the need to perform an internal or third-party audit.
Subcontract Flow-Down Requirements
Prime contractors cannot isolate Section 889 compliance at the top tier. The clause specifies that contractors must insert the substance of FAR 52.204-25, including its reporting requirements and subcontract terms (while excluding paragraph (b)(2)), into all subcontracts and contractual instruments. This flow-down rule applies down every tier, including agreements for commercial products or commercial services. When setting up trade agreements, project managers must avoid common commercial subcontract flow-down mistakes by ensuring that every trade contractor understands the one-business-day reporting rule.
Sources
Published November 9, 2026. No affiliate links on this page. Facts come from the sources linked above; check them for updates.