Procurement and International Law Uncertainties Abound in Anti-Chinese IT Legislation

Contractors involved in the Federal Government's procurement of information technology (IT) systems should consider taking affirmative steps to prepare for significant legal uncertainties arising from a confusing provision enacted by Congress to combat Chinese cyber-espionage. The new provision, which Congress recently included in the "must-pass" appropriations measure that averted a government shutdown, generally prohibits certain agencies from acquiring IT systems that potentially have even a remote connection to the Chinese government. The White House expressed concerns about the provision, but these concerns did not prevent the President from signing the larger package. U.S. businesses, particularly in the high-tech sector, have been critical of the provision, and the White House reportedly has indicated that it may seek to modify or even drop the provision in future years. In the meantime, however, the provision is the law of the land, and contractors should be aware of its potential effects.