A new interim federal rule that took effect earlier this month under the Federal Acquisition Regulation spells trouble for contractors who may be supplying telecom or video surveillance equipment from Huawei Technologies Co. Ltd., ZTE Corp. or from several other manufacturers based in China to the federal government.

Contractors can't provide them anymore if they would be a "substantial component, system or service, or a critical technology" as part of any system being supplied to any federal agency, not just the Defense Department.

Counsel for companies engaged in selling to federal government agencies will have to pay close attention to the new restrictions or risk losing contracts, the right to bid on contracts, or potential liability under the False Claims Act for violating the law. Some smaller companies that can't keep up with the new rule may have to consider withdrawing, national security and government contracts lawyers said.