On June 2, 2023, the Federal Acquisition Regulation Council adopted new FAR provisions effectively banning the use of the popular TikTok application on devices used to conduct federal government business. The new FAR provisions implement a Congressional directive banning TikTok, whose parent company, ByteDance, is Chinese-controlled.
Here’s what contractors should know about the TikTok ban.
Which Prime Contractors Are Covered?
The ban’s scope is very broad.
The TikTok ban is implemented through a new clause, FAR 52.204-27. As of June 2, Contracting Officers are required to include this new clause in almost all new government prime contracts. Unlike many FAR clauses, there are no exceptions for small businesses, contracts below the simplified acquisition threshold, or contracts for commercial items. Even contracts below the micropurchase threshold are covered.
The bottom line is that if you do business with the federal government as a prime contractor, you are almost certain to be covered by the TikTok ban.
What About Subcontractors?
Subcontractors are covered, too. FAR 52.204-27 states that prime contractors must include the substance of the clause “in all subcontracts, including subcontracts for the acquisition of commercial products or commercial services.”
This mandatory flow-down requirement means that prime contractors must be sure to include the clause in their subcontracts – and subcontractors should be prepared to abide by it.
When Does The TikTok Ban Take Effect?
FAR 52.204-27 took effect on June 2, 2023, but it does not apply retroactively to existing contracts. A contractor becomes subject to the TikTok ban when the contractor is awarded a contract, order, option or contract modification containing the clause.
In the interim rule enacting the new FAR clause, the FAR Council specified that:
- The clause must be included in new prime contracts awarded after June 2.
- For existing indefinite-delivery contracts, Contracting Officers shall modify them by July 3, 2023 to include the clause. However, the modification shall only apply to “future orders,” not existing orders.
- If the government exercises an option on an existing contract, the new clause shall be included in the option.
What Does the Ban Require?
Under FAR 52.204-27, a contractor or subcontractor “is prohibited from having or using [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.”
Contrary to a potential misconception, the ban is not limited to government-owned devices. As the clause clearly states, “equipment provided by the Contractor’s employees” is also covered, provided that the equipment is used “to a significant extent in the performance of a service or the furnishing of a product” under the contract.
Note, also, that the new clause prohibits “having” TikTok on the equipment, even if TikTok isn’t being used!
What Should Contractors Do Now?
Contractors should promptly take action to ensure that they are in compliance with the new FAR provisions. As appropriate, contractors should consult with their human resources and legal experts regarding such things as:
- Potential changes to subcontracts and purchase orders to ensure the flow-down of FAR 52.204-27
- Potential changes to employee contracts, handbooks, and similar guidance
- Potential updates to employer technology policies, including the use of employee-furnished technology to conduct business
- Potential employee trainings regarding the TikTok ban
Will the FAR Council Provide Additional Guidance?
Yes–but it may take awhile.
Some contractors may be frustrated with the new rule’s failure to explain what constitutes a “significant” use of equipment in support of a contract. For example, if an employee occasionally uses his or her personal cell phone to answer work emails, does this count? What about an employee who uses a personal computer to work from home one day each week? Or one day each month?
To meet a Congressional deadline, the FAR Council adopted the TikTok ban as an “interim” rule, bypassing the ordinary notice-and-comment rulemaking procedures. The FAR Council will go through the ordinary rulemaking process, however, and ultimately the interim rule will be converted to a final rule. The notice-and-comment rulemaking process will give contractors the chance to ask clarifying questions, but the process takes considerable time and answers may not be available for many months. In the meantime, contractors would be well-advised to seek guidance from their legal counsel.