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This information applies to: All USFWS Programs and Recipients of Federal Financial Assistance Funds
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Overview
On August 13, 2018, President Trump signed into law Public Law 115 - 232 - John S. McCain National Defense Authorization Act for Fiscal Year 2019. Public Law 115-232 contains SEC. 889. Prohibition on Certain Telecommunications and Video Surveillance Services or Equipment which puts a prohibition that no Federal grant funds may be obligated or expanded to:
(A) procure or obtain or extend or renew a contract to procure or obtain any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system; or
(B) enter into a contract (or extend or renew a contract) with an entity that uses any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system.
SEC 889 pulls into the Code of Federal Regulations under 2 CFR 200.216 -- Prohibition on certain telecommunications and video surveillance services or equipment, and 2 CFR 200.471 -- Telecommunication costs and video surveillance costs.
Due to the diversity and uniqueness of the Service’s Financial Assistance Programs, we strongly encourage potential applicants and recipients to submit their program-specific financial assistance questions to the Service Point of Contact listed in the Notice of Funding Opportunity or Notice of Award.
Authorities
2 CFR 200.471 -- Telecommunication costs and video surveillance costs.
Frequently Asked Questions
Please note that these FAQs, while not comprehensive, are based on the best available guidance we have received to date.
Common questions regarding the Office of Management and Budget’s (OMB) implementation of the updates to Title 2 of the Code of Federal Regulations (2 CFR)
Q-1. What are “covered telecommunications equipment or services”?
Section 889 of the NDAA of 2019 defines “covered telecommunications equipment or services” to mean telecommunications and video surveillance equipment or services produced by Huawei Technologies Company, ZTE Corporation, Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of such entities).
“Covered telecommunications equipment or services” also includes telecommunications or video surveillance equipment or services provided by an entity that the Secretary of Defense, in consultation with the Director of the National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes to be an entity that is owned or controlled by the government of a covered foreign country.
Q-2. How do you know if an entity has been added to the list of covered entities?
Entities added to this list will be incorporated into the excluded parties list in the SAM (www.sam.gov). When a user conducts a search of the excluded parties list, a record will appear describing the nature of the exclusion for any entity identified as covered by this prohibition.
Q-3. What is the covered foreign country?
The People’s Republic of China.
Q-4. Can this prohibition be waived for grants?
The prohibition cannot be waived for Federal assistance such as grants.
Q-5. Is it mandatory to include a specific provision in Federal awards and notices of funding opportunity issued on or after August 13, 2020?
The Federal awarding agency must take positive steps to ensure that recipients are aware of the requirements associated with this provision as of August 13, 2020. While referencing 2 CFR Part 200 may likely suffice, including a specific provision may be a best practice in order to ensure clarity, especially because this is a new requirement.
Q-6. Does the section 889 of the NDAA of 2019 prohibition apply to existing Federal awards as of August 13, 2020?
Yes. The section 889 prohibition on covered telecommunications and video surveillance services or equipment is effective on all expenditures charged to Federal awards as of August 13, 2020.
Q-7. Can a Federal award be provided to a recipient when they use covered telecommunications equipment or services?
Yes, as long as the Federal award does not pay for the covered telecommunications and video surveillance services or equipment that the recipient uses. If the Federal agency suspects that the goods and services being procured under the award may in fact be prohibited, it must take appropriate action, consistent with its policies and procedures, and in accordance with the guidance in 2 CFR Part 200.
Q-8. Do existing Federal awards need to be amended to include the provision after August 13, 2020?
This prohibition applies to existing Federal awards. Federal awarding agencies must ensure that recipients are aware of this prohibition and determine if an amendment is needed on a case by case basis.
Q-9. If a Federal award issued prior to August 13, 2020 is amended for non-financial purposes (i.e., no cost extension or scope), does the amendment need to include this prohibition?
This prohibition applies to existing Federal awards. Federal awarding agencies must ensure that recipients are aware of this prohibition and determine if an amendment is needed on a case by case basis.
Q-10. If a Federal award issued prior to August 13, 2020 is amended for the purposes of adding supplemental funds, does the amendment need to include this prohibition?
This prohibition applies to existing Federal awards. Federal awarding agencies must ensure that recipients are aware of this prohibition and determine if an amendment is needed on a case by case basis.
Q-11. Can a Federal award be used to procure goods or services, unrelated to prohibited services or equipment, from an entity that uses such equipment and services?
Yes.
Q-12. Do recipients need to certify that goods or services procured under a Federal award are not for covered telecommunications equipment or services?
Yes, when the recipient signs an award agreement they are certifying that they will comply with all applicable laws, rules, and regulations, including the prohibition on covered telecommunications equipment and services. If the Federal agency suspects that the goods and services being procured under the award may in fact be prohibited, it must follow its own policies and procedures to take appropriate action that aligns with the guidance in 2 CFR Part 200. OMB is separately evaluating the certifications and representations statement in SAM and will make any necessary updates.
Q-13. Can recipients use the costs associated with covered telecommunications equipment or services or equipment to meet their cost sharing or match requirements?
No, such costs are unallowable costs.
Q-14. Can recipients use program income generated by a Federal award to cover the costs associated with covered telecommunications equipment or equipment?
No. Program income must be used for allowable costs in accordance with 2 CFR §200.307.
Q-15. Will this prohibition impact awards that use the de minimis indirect cost rate, as the 10 percent is based on MTDC and not specific indirect costs elements?
No, the prohibition on covered telecommunications and video surveillance services or equipment does not affect a non-Federal entity’s use of the de minimis indirect cost rate; however, the non-Federal entity must review its costs used to determine its de minimis indirect cost rate to ensure that unallowable costs are not included in the calculation. The MTDC cannot include unallowable costs in its calculation of the de minimis indirect cost rate.
Q-16. When a recipient normally charges prohibited services or equipment through their indirect cost pool, can a Federal award cover the same recipient’s indirect costs?
No, like other unallowable costs, covered telecommunications and video surveillance services or equipment costs must not be charged either directly or indirectly to Federal awards. The recipient must separately negotiate an indirect cost rate for their Federal awards that excludes these costs from the indirect cost pool and base amount chargeable to its Federal award(s).
Q-17. How will covered telecommunications equipment or services as a new unallowable expense be implemented for indirect cost rates?
Federally approved indirect cost rate agreements generally do not need to be reopened or amended, but may need to be adjusted in accordance with 2 CFR §200.411. The non-Federal entity must review its current indirect cost rate proposal or previously negotiated rate to ensure that it does not include expenses associated with covered telecommunications equipment or services because the non-Federal entity must certify that the costs included in its proposal are allowable.1
- If a non-Federal entity has not included the covered telecommunications equipment or services, then it should include a statement with each indirect cost proposal affirming that it has not included any costs described in 2 CFR §200.216.
- If a non-Federal entity finds that it has included the covered telecommunications equipment or services in an indirect cost proposal currently under review or a previously negotiated rate, then it should immediately contact the cognizant agency for indirect costs to revise the indirect cost proposal or negotiated rate.
Other FAQ:
Can an Unmanned Aircraft System (UAS) and/or certain telecommunications and video surveillance services or equipment be purchased with Federal funds?
Yes, if they meet the requirement throughout 2 CFR 200, and 200.216, 200.471.
Can I use a previously purchased telecommunications and video surveillance services, equipment or UAS to work on my project?
Yes, if it is not a covered device as noted in 2 CFR 200.216 -- Prohibition on certain telecommunications and video surveillance services or equipment.
Can a UAS be flown anywhere?
No, per Order No. 3379 designated UAS will not be operated on Department-managed lands.
Does OAS-28 Information Bulletin apply to FA?
On October 21, 2022, the Department of the Interior issued OAS-28 Information Bulletin specific to the Department's UAS fleet.
Please note that this memorandum has no effect on the prohibitions on certain telecommunications and video surveillance services or equipment applicable to financial assistance recipients and subrecipients. In 2020, the Office of Management and Budget implemented Public Law 115-232, section 889 prohibitions through an update to the 2 CFR 200 regulations. For more information, see 2 CFR §200.216.
Who is ultimately reasonable to ensure Federal funds are not spent on improper certain telecommunications and video surveillance services or equipment?
The recipient of the financial assistance award.
Who is responsible to ensure where a UAS is being flown?
The recipient of the financial assistance award.
Approved UAS list:
Please note that this list changes so reach out to your Service Project Officer for assistance.
Service staff may find more information posted at HQ - Financial Assistance Support and Oversight - Home (sharepoint.com) under Special Topic Support.
If the UAS you wish to purchase is not on the approved list approved ask yourself these questions:
- Is the UAS manufactured, in whole or in part, by an entity domiciled in an adversary country*?
- Does the UAS use printed circuit boards manufactured by an entity domiciled in an adversary country?
- Does the UAS use flight controller modules manufactured by an entity domiciled in an adversary country
- Does the UAS use sensors manufactured by an entity domiciled in an adversary country?
- Does the UAS use radios manufactured by an entity domiciled in an adversary country?
- Does the UAS use cameras manufactured by an entity domiciled in an adversary country?
7.Does the UAS use gimbals manufactured by an entity domiciled in an adversary country?
8.Does the UAS (including the GCS) contain hardware and software necessary for collecting, storing, and transmitting photographs, videos, location information, flight paths, or any other data collected by the drones that is traceable by an entity domiciled in an adversary country?
*The term “adversary country” means the Democratic People's Republic of Korea, the Islamic Republic of Iran, the People's Republic of China, the Russian Federation, or, as determined by the Secretary of Commerce, any other foreign nation, foreign area, or foreign non-government entity engaging in long-term patterns or serious instances of conduct significantly adverse to the national or economic security of the United States.
NOTE: If you answered YES to any of these questions above, then you are dealing with a "Covered UAS” and it cannot be purchased with Federal funds.
Learning Aids
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Related Pages
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Resources
POCs:
Please reach out to your Service Project Officer for assistance.
Service staff may find more information posted at HQ - Financial Assistance Support and Oversight - Home (sharepoint.com) under Special Topic Support.
References
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