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Prohibitions on Expending FEMA Award 

Funds for Covered Telecommunications 

Equipment or Services

FEMA Policy #405-143-1

BACKGROUND 

In 2018, Congress enacted legislation that prohibited obligating or expending federal award 

funds on certain telecommunications products or from certain entities for national security 

reasons. The statute and implementing regulations, as they apply to FEMA recipients and 

subrecipients, provide for two distinct prohibitions: 1) to prevent the use of federal award funds 

to procure or obtain covered telecommunications equipment or services; and 2) to prevent the 

use of federal award funds to contract with an entity that uses covered telecommunication 

equipment or services. This policy supersedes FEMA Interim Policy 405-143-1, Prohibitions on 

Expending FEMA Award Funds for Covered Telecommunications Equipment or Services,

issued November 24, 2020.

PURPOSE

The purpose of this policy is to provide guidance to FEMA’s recipients and subrecipients and 

their contractors and subcontractors on prohibitions regarding certain telecommunications and 

video surveillance equipment and services beginning on or after August 13, 2020. These 

prohibitions are described in the John S. McCain National Defense Authorization Act for Fiscal 

Year 2019 (FY 2019 NDAA)1, and 2 Code of Federal Regulations (CFR) Part 200, Uniform 

Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.2

PRINCIPLES 

The following principles underpin this policy: 

A. Balance protecting national security, including homeland security and critical infrastructure, 

with the addition of required duties and limitations on FEMA’s recipients and subrecipients.

1 Pub. L. No. 115-232 (2018), Under section 889(a), these prohibitions also apply to federal procurements, and those 

prohibitions went into effect on Aug. 13, 2019. The General Services Administration, Department of Defense, and National 

Aeronautics and Space Administration have already amended the Federal Acquisition Regulation (FAR) and issued other 

guidance to implement these prohibitions. For additional information on the FAR provisions, see 48 CFR. §§ 4.2100-

4.2105, 52.204-24 – 52.204-26.

2 The new regulation at 2 CFR § 200.216 prohibits recipients and subrecipients from obligating or expending loan or grant 

funds; however, the updated regulations at 2 CFR. § 200.1 define the terms “recipient” and “subrecipient” in relation to the 

term federal award, which itself is defined in relation to the term federal financial assistance. Per the updated 2 CFR § 

200.1, federal financial assistance, specifically for purposes of § 200.216, means grants, cooperative agreements, loans, 

and loan guarantees. 
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B. Provide clarity on how the statutory and regulatory prohibitions apply to recipients and 

subrecipients of FEMA grants, cooperative agreements, loans, and loan guarantees 

(collectively referred to in this policy as “FEMA awards” or “FEMA award funds”).

C. Reduce complexity by issuing a single policy for all FEMA awards, subject to limited 

programmatic variations.

D. Draw on existing regulations and guidance applicable to federal procurements, as 

appropriate, to promote consistent interpretation and definitions across the Federal 

Government.

REQUIREMENTS

A. APPLICABILITY

Outcome: To ensure these prohibitions are implemented in accordance with the statute and 

clarify when and to whom these prohibitions apply.

1. Under all open and future FEMA awards, this policy applies to: 

a. Purchase orders, contracts, subcontracts, or similar acquisition actions:

i. That are new, renewed or extended on or after August 13, 2020;

ii. For all goods or services of any dollar amount; and

iii. By any FEMA recipient or subrecipient or their contractor or subcontractor 

under FEMA awards.

B. PROHIBITIONS

Outcome: To describe the statutory and regulatory prohibitions that apply to FEMA awards.

1. Effective August 13, 2020, FEMA recipients and subrecipients, as well as their contractors 

and subcontractors, may not obligate or expend any FEMA award funds to: 

a. 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 of any system;

b. Enter into, 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 of any 

system; or

c. Enter into, extend, or renew contracts with entities that use covered 

telecommunications equipment or services as a substantial or essential component

of any system, or as critical technology as part of any system.3

C. EXCEPTIONS

Outcome: To explain the statutory exceptions to the prohibitions.

3 The statute prohibits obligating or expending any FEMA award funds on covered telecommunications and equipment; 

therefore, these prohibitions flow down to a recipient’s or subrecipient’s contractors and subcontractors.
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1. By statute, the prohibitions do not apply to:

a. A service that connects to the facilities of a third-party, such as backhaul, roaming, 

or interconnection arrangements; or

b. Telecommunications equipment that cannot route or redirect user data traffic or 

permit visibility into any user data or packets that such equipment transmits or 

otherwise handles.

2. By necessary implication and regulation, the prohibitions do not apply to:

a. Covered telecommunications equipment or services that:

i. Are not used as a substantial or essential component of any system; and

ii. Are not used as critical technology of any system.

b. Other telecommunications equipment or services that are not considered covered 

telecommunications equipment or services.4

D. REPLACEMENT OF COVERED TELECOMMUNICATIONS EQUIPMENT OR SERVICES 

Outcome: To explain the statutory requirement to prioritize available funding for replacement 

equipment or services.

1. Section 889(b)(2) of the FY 2019 NDAA directs federal agencies to prioritize available 

funding and technical support to assist recipients and subrecipients as is reasonably 

necessary to:

a. Transition from covered telecommunications equipment or services and procure 

replacement equipment or services; and 

b. Sustain communications service to users and customers.

2. Depending on the specific FEMA program, recipients and subrecipients may be permitted

to use FEMA award funds to purchase replacement equipment or services.

a. Recipients and subrecipients should refer to program guidance or contact the 

applicable program office to determine whether replacement equipment or services

is eligible under that program.

E. CONTRACT PROVISION 

Outcome: To communicate that the regulation requires FEMA recipients and subrecipients and 

their contractors and subcontractors to include a contract provision in all FEMA-funded 

contracts and subcontracts, including any purchase orders.5

1. For purchases in support of declarations and FEMA awards issued on or after November

12, 2020, for all new, extended, or renewed contracts using FEMA funds, especially for 

covered telecommunications equipment or services:

4 The regulation at 2 CFR § 200.471 describes telecommunications and video surveillance costs as generally allowable 

under the cost principles except when they are covered by the prohibitions in the FY 2019 NDAA and 2 CFR § 200.216. 5 2 CFR Part 200, Appendix II and 2 CFR § 200.327.
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a. FEMA recipients and subrecipients are required to include a provision in their 

contracts explaining the prohibitions under section 889 of the FY 2019 NDAA and as 

clarified in this policy. 

b. This also applies to subcontracts under any new, extended, or renewed contract. 

2. For the required contract provision, recipients and subrecipients may draft their own 

provision that meets the requirements of the FY 2019 NDAA and 2 CFR § 200.216 to 

include in contracts and subcontracts. Alternatively, they may include language from 

FEMA’s Contract Provision Guide (June 2021) in their contracts and subcontracts.

Recipients and subrecipients should also consult their own contracting officials or legal 

counsel when incorporating any contract provision. 

Pamela S. Williams

Assistant Administrator

Grant Programs Directorate

May 10, 2022
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ADDITIONAL INFORMATION

REVIEW CYCLE

FEMA Policy 405-143-1, Prohibitions on Expending FEMA Award Funds for Covered 

Telecommunications Equipment or Services, will be reviewed, reissued, revised, or rescinded 

within four years of the issue date.

AUTHORITIES 

A. Section 889 of the John S. McCain National Defense Authorization Act for Fiscal Year 

2019 (FY 2019 NDAA), Pub. L. No. 115-232 (2018).

B. 2 CFR §§ 200.1, 200.216, 200.317 – 200.327, 200.471.

C. 2 CFR Part 200, Appendix II.

D. OMB Final Guidance, Guidance for Grants and Agreements, 85 Fed. Reg. 49506 (August

13, 2020).

REFERENCES

48 CFR §§ 4.2100-4.2105 (FAR definitions implementing section 889, requirements for 

solicitation provisions and contract clauses), 52.204-24-52.204-26 (FAR language required for 

contract clauses).

DEFINITIONS

Backhaul means intermediate links between the core network, or backbone network, and the 

small subnetworks at the edge of the network (e.g., connecting cell phones/towers to the core 

telephone network). Backhaul can be wireless (e.g., microwave) or wired (e.g., fiber optic, 

coaxial cable, Ethernet).6

Covered foreign country means the People’s Republic of China.7

Covered telecommunications equipment or services means—

a. Telecommunications equipment produced by Huawei Technologies Company or ZTE 

Corporation, (or any subsidiary or affiliate of such entities);

b. For the purpose of public safety, security of government facilities, physical security 

surveillance of critical infrastructure, and other national security purposes, video 

surveillance and telecommunications equipment produced by Hytera Communications 

6 48 CFR § 4.2101. FEMA notes that the FAR does not technically apply to grants, cooperative agreements, or loans, but 

its definitions are still useful in FEMA’s implementation of section 889 to its awards in the absence of other applicable 

definitions.

7 FY 2019 NDAA § 889(f)(2).
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Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology 

Company (or any subsidiary or affiliate of such entities);

c. Telecommunications or video surveillance services provided by such entities or using 

such equipment; or

d. Telecommunications or video surveillance 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 

to be an entity owned or controlled by, or otherwise connected to, the government of a 

covered foreign country.8

Critical Technology means—

a. Defense articles or defense services included on the United States Munitions List set 

forth in the International Traffic in Arms Regulations under subchapter M of chapter I of 

title 22, CFR;

b. Items included on the Commerce Control List set forth in Supplement No. 1 to part 774 

of the Export Administration Regulations under subchapter C of chapter VII of title 15 

CFR, and controlled –

(i) Pursuant to multilateral regimes, including for reasons relating to national security, 

chemical and biological weapons proliferation, nuclear nonproliferation, or missile 

technology; or

(ii) For reasons relating to regional stability or surreptitious listening;

c. Specially designed and prepared nuclear equipment, parts and components, materials, 

software, and technology covered by part 810 of title 10 CFR (relating to assistance to 

foreign atomic energy activities);

d. Nuclear facilities, equipment, and material covered by part 110 of title 10 CFR (relating 

to export and import of nuclear equipment and material);

e. Select agents and toxins covered by part 331 of title 7CFR part 121 of title 9 of such 

Code, or part 73 of title 42 of such Code; or

f. Emerging and foundational technologies controlled pursuant to section 1758 of the 

Export Control Reform Act of 2018 (50 United States Code 4817).9

Interconnection arrangements means arrangements governing the physical connection of 

two or more networks to allow the use of another's network to hand off traffic where it is 

8 FY 2019 NDAA § 889(f)(3).

9 48 CFR § 4.2101.
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ultimately delivered (e.g., connection of a customer of telephone provider A to a customer of 

telephone company B) or sharing data and other information resources.10

Roaming means cellular communications services (e.g., voice, video, data) received from a 

visited network when unable to connect to the facilities of the home network either because 

signal coverage is too weak or because traffic is too high.11

Substantial or essential component means any component necessary for the proper function 

or performance of a piece of equipment, system, or service.12

Telecommunications equipment or services means telecommunications or video 

surveillance equipment or services, such as, but not limited to, mobile phones, land lines, 

internet, video surveillance, and cloud servers.13

MONITORING 

FEMA will monitor the implementation and compliance of this policy through its regular

programmatic monitoring procedures.

QUESTIONS

Questions regarding this policy may be directed to the GPD Policy mailbox at fema-gpdpolicy@fema.dhs.gov.

10 48 CFR § 4.2101. 11 Id.

12 Id.

13 See 2 CFR §§ 200.1, 200.471.