WASHINGTON, D.C. – U.S. Senator Gary Peters (D-MI), Chairman of the Homeland Security and Governmental Affairs Committee, cosponsored legislation to avert possible conflicts of interest on the part of firms who consult with U.S. federal agencies and adversarial foreign governments. The bill would prohibit the Department of Defense (DoD) and other federal agencies from working with consulting firms that simultaneously contract with adversarial foreign governments such as China and Russia. The bill would prevent adversarial nations from potentially gaining access to sensitive information and ensure that contractors remain unbiased when assisting on critical economic and national security interests for the federal government.
“Americans deserve full assurance that when their tax dollars are being spent on federal contracts, those funds aren’t being used in a way that undermines our own national interests,” said Senator Peters. “Transparency and accountability are essential, especially when it comes to federal contracting. Our bill will ensure contracting firms are using taxpayer funds responsibly and help prevent foreign adversaries from exploiting business relationships with contractors to interfere with American interests.”
News reports have found that DoD and other federal agencies work with firms that are simultaneously providing consulting services to adversarial governments like China and Russia. These types of contracts have the potential to undermine the economic and national security of the United States by increasing the chance of sensitive information making its way to bad actors. For example, the consulting firm McKinsey & Company has maintained several federal contracts to support national security projects, while simultaneously taking on projects with Chinese and Russian state-owned firms. This work has created concern about the impartiality of advice provided by McKinsey consultants and the possibility of sensitive information getting into the wrong hands.
The bipartisan Time to Choose Act will prevent federal agencies from contracting for consulting services with firms that also have consulting arrangements with foreign adversarial governments. The legislation will also impose penalties on consulting firms that knowingly conceal or provide inaccurate information about their contracts, ensuring that federal consultants and other contractors are using taxpayer funds in a manner that prioritizes and advances the interests of the American people.
Peters has worked to increase transparency in federal contracting. He authored the Preventing Organizational Conflicts of Interest in Federal Acquisition Act, which was signed into law in 2022. Last year, Peters, in coordination with Senator Josh Hawley, called on the U.S. Government Accountability Office (GAO) to examine the issue of potential security risks posed by consulting firms, laying the groundwork for this current legislation.
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