On June 2, 2023, the FAR Council issued an Interim Final Rule implementing a new FAR provision, FAR 52.204-27, Prohibition on a ByteDance Covered Application (June 2023), that imposes on government contractors a broad prohibition on the use or even the presence of the TikTok app or other software developed by ByteDance on "information technology" equipment used by contractors and contractor personnel in the performance of a federal contract. Although this has been issued as an Interim Final Rule to allow for the required notice and comment period, the FAR provision is effective immediately. This ban has been implemented to protect against the national security concerns that the Government has about the controversial TikTok app developed by Chinese-owned ByteDance. Comments on the interim rule are due on or before August 1, 2023.
The new FAR clause at FAR 52.204-27, Prohibition on a ByteDance Covered Application, states: "The Contractor is prohibited from having or using a covered application [TikTok] on any information technology owned or managed by the Government, or on any information technology used or provided by the Contractor under this contract, including equipment provided by the Contractor's employees."
This FAR clause applies to all contracts, including contracts at or below the simplified acquisition threshold and contracts for commercial products and services. Agencies are directed to include the new FAR clauses in any solicitation issued on or after June 2, 2023. Additionally, the new clause will be included in any contract award and any modification or option of an existing contract or order that extends the period of performance on or after June 2, 2023. Agencies have until July 3, 2023 to modify IDIQ contracts to include this FAR provision.
The Broad Range of IT Covered.
Rather than using the definition of "Information Technology" found in FAR 2.101 Definitions, this new FAR clause applies the much broader definition of "Information Technology" found in 40 U.S.C. 11101(6), which defines Information Technology as:
(1) Means any equipment or interconnected system or subsystem of equipment, used in the automatic acquisition, storage, analysis, evaluation, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information by the executive agency, if the equipment is used by the executive agency directly or is used by a contractor under a contract with the executive agency that requires the use—
- Of that equipment; or
- Of that equipment to a significant extent in the performance of a service or the furnishing of a product;
(2) Includes computers, ancillary equipment (including imaging peripherals, input, output, and storage devices necessary for security and surveillance), peripheral equipment designed to be controlled by the central processing unit of a computer, software, firmware and similar procedures, services (including support services), and related resources; but
(3) Does not include any equipment acquired by a Federal contractor incidental to a Federal contract.
There are two aspects of this definition "Information Technology" that contractors will need to consider in crafting policies to comply with this FAR provision. The first is how to determine whether the equipment is used "to a significant extent in the performance of a service or the furnishing of a product." The second is how to determine when equipment is acquired by the contractor "incidental to a Federal contract." A contracting officer and a contractor may have different interpretations as to whether IT equipment is used to a "significant extent" in contract performance or is acquired "incidental" to a contract. The rule makes clear that a contractor employee's personally-owned cell phone not used in contract performance is excluded from the prohibition.
The Broad Range of Contract Vehicles Covered.
The interim final rule requires that the new FAR clause be inserted "in all solicitations and contracts unless an exception is granted in accordance with OMB Memorandum M-23-13."
"All" means "all:" contracts at or below the simplified acquisitions threshold, commercial products, commercial services, and commercially available-off-the-shelf (COTS) items, future orders under IDIQ contracts, and the exercise of an option or modifying an existing contract or task or delivery order to extend the period of performance. The substance of the clause must be flowed down "to all subcontracts." There are very narrow exceptions for contractors performing certain law enforcement activities, national security activities, and security research, which can only be granted in accordance with OMB Memorandum M–23–13.
A Simple Compliance Solution.
The most straightforward way for contractors to comply with this new FAR provision is to delete TikTok from any computer or digital device that could be involved in contract performance and implement a policy that prohibits contractor employees from downloading, accessing, or installing TikTok on any device that they use to access company or government client email, messages, or documents related to contract performance. This would not prohibit employees from using TikTok on personal devices that they do not use in connection with contract performance. Contractors should also provide guidance to employees on how to remove TikTok from their personal devices used in contract work. Contractors will also need to ensure that, once the new FAR clause is added to its existing contracts, it flows those requirements down to its subcontractors.
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