Section 889 for Software Companies: The Telecom Representation Every Offer Makes
By Philip Luca — Founder of GovExpress; prior domain experience at Bloomberg Government and GovWin IQ.
Every software company that registers in SAM.gov and submits a federal offer answers a question it may never have thought about: does your company provide or use certain telecommunications or video surveillance equipment made by a short list of foreign manufacturers? The question comes from Section 889 of the National Defense Authorization Act for Fiscal Year 2019, and the answer is a representation the government relies on.
For most SaaS companies the honest answer is “no”. But “most” isn’t “all”, and the rule reaches further than people expect. It isn’t limited to what you deliver to the government. It covers what your company uses. This guide explains what Section 889 prohibits, which FAR clauses carry it into your contract, and how to make the representation with confidence.
What Section 889 prohibits
Section 889 has two parts, and they apply to different things.
- Part A prohibits federal agencies from buying covered telecommunications equipment or services as a substantial or essential component of any system. It took effect in August 2019 and governs what you deliver.
- Part B prohibits agencies from contracting with any entity that uses covered equipment or services as a substantial or essential component of any system. It took effect in August 2020. It applies whether or not that use has anything to do with your federal contract.
Part B is the one that surprises software companies. You might deliver a pure cloud application and still have a problem if covered equipment sits elsewhere in your company’s own operations.
What counts as covered
The statute names specific companies, along with their subsidiaries and affiliates:
| Category | Named companies |
|---|---|
| Telecommunications equipment | Huawei Technologies Company, ZTE Corporation |
| Video surveillance and telecommunications equipment (for specified security uses) | Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, Dahua Technology Company |
| Services | Telecommunications or video surveillance services provided by those entities or using their equipment |
The definition also extends to equipment or services from entities the government determines to be owned or controlled by, or connected to, the government of a covered foreign country. Check the current FAR text and SAM.gov guidance rather than relying on a fixed list.
Typical places covered equipment turns up in a software company are not your product at all. Look at office security cameras and video recorders, building access systems, network routers and switches, conference room hardware, and the telecom services behind your offices. Subsidiaries and white-label products matter too. Equipment sold under another brand can still be made by a covered manufacturer.
The three FAR clauses
Section 889 reaches your contract through three clauses in FAR Subpart 4.21.
| Clause | What it does | When you answer it |
|---|---|---|
| 52.204-26, Covered Telecommunications Equipment or Services — Representation | Annual representation of whether you provide, and whether you use, covered equipment or services | In your SAM.gov registration |
| 52.204-24, Representation Regarding Certain Telecommunications and Video Surveillance Services or Equipment | Offer-by-offer representation, with disclosure if you answer “does” | In an individual offer, where the solicitation includes it |
| 52.204-25, Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment | The prohibition itself, plus a duty to report covered equipment you discover during performance | In the awarded contract |
If you answer “does not” to both questions in your SAM.gov representation, a contracting officer can generally rely on that for an individual offer. If you answer “does” to either, expect to provide detail in the offer under 52.204-24.
Under 52.204-25, a contractor that identifies covered equipment or services during performance must report it to the contracting officer, or to the designated Department of War reporting site for DoW contracts, within one business day, with further detail on mitigation to follow within ten business days. Treat the deadline as real.
“Reasonable inquiry” is the standard
The representation in 52.204-26 is based on a reasonable inquiry. The FAR defines this as an inquiry designed to uncover any information in your company’s possession about the identity of the producer or provider of the covered equipment and services you use. It explicitly does not require an internal or third-party audit.
So you don’t need to tear apart every device. You do need to look, and to be able to show you looked. A practical inquiry for a software company:
- Inventory network and physical security hardware in every office, including cameras, recorders, routers, switches, firewalls and access control.
- Ask your IT provider, landlord and building security vendor what equipment serves your space.
- List your telecom and connectivity providers and ask them for a Section 889 statement.
- Check your cloud and hosting providers’ published compliance statements. The major federal cloud providers publish them.
- Include subsidiaries and affiliates covered by your registration.
- Record the date, the scope and who signed off, and repeat it before your annual SAM.gov renewal.
A representation is a vendor claim
A Section 889 answer is self-attested. The government accepts it on your word, the same way it accepts many registration certifications, and nobody inspects your office cameras before award. That’s exactly why it matters to get right. A representation you can’t support is a liability, and the consequences of a false one are significant. Self-attested isn’t the same as verified, and buyers who know the difference read your documentation that way. See verified vs. self-attested: what federal buyers actually check.
Where it fits in your federal readiness
Section 889 is one line in a longer list of things a buyer expects to be settled before an offer arrives. That list includes an active SAM.gov registration, license terms an agency can sign (see software license terms in federal contracts), accessibility documentation and an honest account of your security posture. If you sell through a reseller or as a subcontractor, the prime will flow the clause down and ask you for the same answer. See teaming and subcontracting for software companies.
To see where your company stands across the categories federal buyers check, score your company’s federal readiness.
Related reading
The CMMC brief
What the Phase 2 suspension changed and what it did not — the obligations that still bind, the assessment path a contract puts you on, the scoping decision that drives the cost, and the sequence that fits inside a pipeline. Sourced from the primary record.