Federal Contracting News

Huawei Fails to Overturn U.S. Ban on Federal Contracting

Feb. 18, 2020, 8:22 PM

Huawei Technologies USA Inc. failed to convince a Texas federal court that the U.S. government’s decision to ban the company from federal contracting constituted an unconstitutional bill of attainder, a Tuesday ruling said.

The U.S. Supreme Court has only struck down five laws as unconstitutional bills of attainder, also known as legislative punishments without trial, since 1789.

The ban in section 889 of the 2019 National Defense Authorization Act doesn’t punish Huawei based on infamy and disloyalty, Judge Amos L. Mazzant of the U.S. District Court for the Eastern District of Texas said.

The purpose of the ban is to protect telecommunications systems of federal agencies, contractors, and grant and loan recipients from Chinese cyberthreats, and is therefore nonpunitive, the court said.

The provision represents no more than a customer’s decision to take its business elsewhere, the court said.

“Huawei can still conduct business with every other company and individual in America as well as the remaining 169 countries and regions it currently does business with throughout the world,” the court said.

The court also said the prohibition on Huawei products isn’t permanent. The Director of National Intelligence may waive the prohibition if security threats Huawei poses subside, the court said.

The case is Huawei Techs. USA Inc. v. United States, E.D. Tex., No. 19-cv-159, 2/18/20.

To contact the reporter on this story: Daniel Seiden in Washington at dseiden@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com

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