Due to espionage concerns, the company was prohibited from selling to U.S. governments.
The United States government purchased technology from a controversial Chinese firm despite a federal ban.
According to Tech Crunch , at least three government agencies including the military purchased video surveillance equipment from Lorex, a wholly-owned subsidiary of a company banned from selling technology in the United States.
Dahua Technology was among several Chinese companies that were banned from selling technology to America under the 2019 defense expenditure law. This was due to concerns that the Chinese government might use transactions to carry out espionage.
Dahua was also added to a federal economic restriction list in 2019, due to its association with efforts by China to suppress Uighur populations in China’s Xinjiang area.
TechCrunch records show that federal agencies spent thousands on Lorex’s video surveillance equipment, including the Drug Enforcement Agency, which purchased nine Lorex hard drives through a Washington, D.C. tech supplier.
TechCrunch was told by a spokesperson for the DEA that purchases were made through the General Services Administration, but that they did not confirm if Lorex products were pulled from the GSA government shopping portal.
GSA stated in a statement to Tech Crunch that the agency has several means to vet vendors and products purchased on GSA Advantage. This is in accordance to the Federal Acquisition Regulation (FAR). Contractors must also comply with clauses and provisions in the FAR that require them to declare whether they are selling covered technology. GSA Advantage is removed from products found to be in violation.
Also, records show that the Department of the Army and the Defense Finance and Accounting Service of the Department of Defense bought Lorex equipment.
Tech Crunch was informed by the Army that contractors are responsible for verifying equipment comes from legitimate companies.
“The prohibitions of Section 889 of National Defense Authorization Act Fiscal Year 2019 and Public Law 115-223 were implemented by the Department of Defense on Aug. 13, 2020. Federal contracts require companies that propose federal contracts to prove their compliance with the various Federal Acquisition Regulation and Defense Supplement provisions and clauses. This includes those required by P.L. 115-232 on the System for Award Management website. According to Lt. Col. Brandon Kelley, an Army spokesperson, Title 18 of US Code or civil liability under False Claims Act is applicable if a company makes false representations.”
The House Armed Services Committee’s Democratic spokesperson is urging the Department of Defense “appropriate action”
Monica Matoush stated that the committee expects the Department of Defense “to take appropriate action to examine these reports and, in the event that they are substantiated to take action to mitigate harm or prevent future problems.”
Fox Business received no comment from the Department of Defense about possible investigations into the matter, and was directed to individual agencies for any inquiries.