On December 4th, 2023, contractors are obligated to eliminate certain technology from their supply chains following a new interim rule. This rule, issued under the Federal Acquisition Supply Chain Security Act of 2018 (FASCSA), prevents contractors from delivering or using covered articles and sources that are banned or ordered for removal. The intended goal behind this new guideline is to remove possible loopholes that could potentially be exploited by foreign adversaries to commit harmful cyber acts.
The FASCSA, which enforces this interim rule, allows the executive branch through the Federal Acquisition Security Council to proclaim exclusion or removal orders on specific information communications technology or services. This provision is premised on the basis that a given technology or service presents a considerable risk to the federal information and communication systems or the supply chain.
This interim rule, therefore, carries a tremendous implication for contractors who are part of the federal supply chain. It necessitates the re-evaluation of their current sources and a probable restructuring of their supply chains to ensure compliance. Acting on these new guidelines, contractors must incorporate necessary changes to avoid legal implications that may arise due to continuing with the banned articles or sources in their supply chains.
As a final note, the rule’s effectiveness is entirely reliant on robust enforcement and coordination between the various bodies involved. Therefore, timely action and consistent adherence to this new guideline will be crucial for navigating the changes ushered in by this interim rule.
This legal news has been produced based on insights obtained from jd supra.