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Senator Hassan, Colleagues Introduce Bipartisan Bill to Prevent Chinese, Russian Influence in National Security Contracting

Senator Hassan Has Led Efforts to Hold McKinsey Responsible for Potential Conflicts of Interest When Contracting with the Federal Government

WASHINGTON – U.S. Senator Maggie Hassan (D-NH) joined Senator Joni Ernst (R-IA) and Senator Gary Peters (D-MI) in introducing a bipartisan bill to increase federal oversight to help prevent national security consulting firms from contracting both with the United States and countries like Russia and China.

The Combating Obstructive National Security Underreporting of Legitimate Threats (CONSULT) Act streamlines policies across government agencies to identify potential conflicts of interest within consulting firms or government contractors and permit using those conflicts to disqualify firms from being awarded national security contracts.

“We’ve seen federal contractors like McKinsey take on work that could undermine our own national security – including by working for the Pentagon while also working for Russia’s military defense industry and Chinese state-owned enterprises,” said Senator Hassan. “This is deeply concerning, and we need to ensure that these potential conflicts of interest do not occur. This bipartisan legislation will strengthen our national security, and I urge our colleagues to join us in moving this critical bill forward.”

The CONSULT Act comes after reports surfaced that the consulting firm McKinsey & Company was providing strategic advice for state-owned companies in China and Russia – while also being awarded national security contracts by the United States. These Chinese and Russian entities include a handful that have been blacklisted by federal agencies.

Specifically, the CONSULT Act would:

  • Develop a government-wide policy and guidance to mitigate and eliminate organizational conflict of interests relating to national security.
  • Require consulting firms to disclosure any potential organizational conflict of interest with certain entities, such as beneficial ownership, active contracts, contracts held within the last five years, and any other relevant information with foreign adversarial entities or governments.
  • Allow for these conflicts of interest to be grounds for denial of a contract, or for the suspension and debarment of a contractor.
  • Require the Federal Acquisition Regulatory Council (FARC) to update federal acquisition regulations for implementation.

Countries in which doing business qualifies as a conflict of interest include: China or any Chinese state-owned enterprise; Russia or any Russian state-owned entity; any state sponsor of terrorism (Iran, North Korea, Syria and Cuba); and other countries that have been engaged in a project that has been declared a crime against humanity by the Secretary of State. If a firm discloses that they have previously, or are actively engaged in business with these countries, they could be denied a new contract. If firms fail to disclose these relationships, they could be suspended from a current job or banned from federal contracting altogether.

Senator Hassan has led efforts dating back to last year to hold McKinsey responsible for potential conflicts of interest when contracting with the federal government. During the Senator’s questioning at a Senate hearing earlier this year, a top FDA official announced that the FDA has stopped issuing contracts to McKinsey pending ongoing investigations into potential conflicts of interest. Prior to that, the Senator led her colleagues in calling for a Health and Human Services Inspector General investigation on the FDA’s work with McKinsey and FDA’s contracting policies.

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