[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 3810 Reported in Senate (RS)]
<DOC>
Calendar No. 734
118th CONGRESS
2d Session
S. 3810
[Report No. 118-314]
To prohibit conflict of interests among consulting firms that
simultaneously contract with the Government of the People's Republic of
China and the United States Government, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 27, 2024
Mr. Hawley (for himself, Mr. Scott of Florida, Mr. Rubio, and Mr.
Peters) introduced the following bill; which was read twice and
referred to the Committee on Homeland Security and Governmental Affairs
December 19 (legislative day, December 16), 2024
Reported by Mr. Peters, with an amendment and an amendment to the title
[Strike out all after the enacting clause and insert the part printed
in italic]
_______________________________________________________________________
A BILL
To prohibit conflict of interests among consulting firms that
simultaneously contract with the Government of the People's Republic of
China and the United States Government, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
<DELETED>SECTION 1. SHORT TITLE.</DELETED>
<DELETED> This Act may be cited as the ``Time to Choose Act of
2024''.</DELETED>
<DELETED>SEC. 2. FINDINGS.</DELETED>
<DELETED> Congress makes the following findings:</DELETED>
<DELETED> (1) The Department of Defense and other agencies
in the United States Government regularly award contracts to
firms such as Deloitte, McKinsey & Company, and others who are
simultaneously providing consulting services to the Government
of the People's Republic of China and proxies or affiliates
thereof.</DELETED>
<DELETED> (2) The provision of such consulting services by
firms like Deloitte, McKinsey & Company, and others to entities
in the People's Republic of China directly supports efforts by
that nation's government to generate economic and military
power that it can then use to undermine the economic and
national security of the American people, including through
economic coercion and by threatening or using military force
against us.</DELETED>
<DELETED> (3) It is a conflict of interest for firms like
Deloitte, McKinsey & Company, and others to simultaneously aid
in the efforts of the Government of the People's Republic of
China to undermine the economic and national security of the
United States while they are simultaneously contracting with
the Department of Defense and other United States Government
agencies responsible for defending the United States from
foreign threats, above all from China.</DELETED>
<DELETED> (4) Firms like Deloitte, McKinsey & Company, and
others should no longer be allowed to engage in such a conflict
of interest and should instead be required to choose between
aiding the efforts of the Government of the People's Republic
of China to harm the United States or helping the United States
Government to defend its citizens against such foreign
coercion.</DELETED>
<DELETED>SEC. 3. PROHIBITION ON FEDERAL CONTRACTING WITH ENTITIES THAT
ARE SIMULTANEOUSLY AIDING IN THE EFFORTS OF THE PEOPLE'S
REPUBLIC OF CHINA TO HARM THE UNITED STATES.</DELETED>
<DELETED> In order to end conflict of interests in Federal
contracting among consulting firms that simultaneously contract with
the United States Government and covered foreign entities, the Federal
Acquisition Regulatory Council shall, not later than 180 days after the
date of the enactment of this Act, amend the Federal Acquisition
Regulation--</DELETED>
<DELETED> (1) to require any entity that provides the
services described in the North American Industry
Classification System's Industry Group code 5416, prior to
entering into a Federal contract, to certify that neither it
nor any of its subsidiaries or affiliates hold a contract with
one or more covered foreign entities; and</DELETED>
<DELETED> (2) to prohibit Federal contracts from being
awarded to an entity that provides the services described under
the North American Industry Classification System's Industry
Group code 5416 if the entity or any of its subsidiaries or
affiliates are determined, based on the self-certification
required under paragraph (1) or other information, to be a
contractor of, or otherwise providing services to, a covered
foreign entity.</DELETED>
<DELETED>SEC. 4. PENALTIES FOR FALSE INFORMATION ON CONTRACTING WITH
THE PEOPLE'S REPUBLIC OF CHINA.</DELETED>
<DELETED> (a) Termination, Suspension, and Debarment.--If the head
of an executive agency determines that a consulting firm described in
section 3 has knowingly submitted a false certification or information
on or after the date on which the Federal Acquisition Regulatory
Council amends the Federal Acquisition Regulation pursuant to such
section, the head of the executive agency shall terminate the contract
with the consulting firm and consider suspending or debarring the firm
from eligibility for future Federal contracts in accordance with
subpart 9.4 of the Federal Acquisition Regulation.</DELETED>
<DELETED> (b) False Claims Act.--A consulting firm described in
section 3 that, for the purposes of the False Claims Act, intentionally
hides or misrepresents one or more contracts with covered foreign
entities shall be subject to the penalties and corrective actions
described in the False Claims Act, including liability for three times
the amount of damages which the United States Government sustains,
including funds or other resources expended on or in support of the
solicitation, selection, and performance of such contracts.</DELETED>
<DELETED>SEC. 5. DEFINITIONS.</DELETED>
<DELETED> In this Act:</DELETED>
<DELETED> (1) Covered foreign entity.--The term ``covered
foreign entity'' means--</DELETED>
<DELETED> (A) a person, business trust, business
association, company, institution, government agency,
university, partnership, limited liability company,
corporation, or any other individual or organization
that can legally enter into contracts, own properties,
or pay taxes on behalf of, the Government of the
People's Republic of China;</DELETED>
<DELETED> (B) the Chinese Communist Party;</DELETED>
<DELETED> (C) the People's Republic of China's
United Front;</DELETED>
<DELETED> (D) an entity owned or controlled by, or
that performs activities on behalf of, a person or
entity described in subparagraph (A), (B), or (C);
and</DELETED>
<DELETED> (E) an individual that is a member of the
board of directors, an executive officer, or a senior
official of an entity described in subparagraph (A),
(B), (C), or (D).</DELETED>
<DELETED> (2) Executive agency.--The term ``executive
agency'' has the meaning given the term in section 133 of title
41, United States Code.</DELETED>
<DELETED> (3) False claims act.--The term ``False Claims
Act'' means sections 3729 through 3733 of title 31, United
States Code.</DELETED>
<DELETED> (4) North american industry classification
system's industry group code 5416.--The term ``North American
Industry Classification System's Industry Group code 5416''
refers to the North American Industry Classification System
category that covers Management, Scientific, and Technical
Consulting Services as Industry Group code 5416, including
industry codes 54151, 541611, 541612, 541613, 541614, 541618,
54162, 541620, 54169, 541690.</DELETED>
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Time to Choose Act of 2024''.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) The Department of Defense and other agencies in the
United States Government regularly award contracts to firms
that are simultaneously providing consulting services to
foreign governments and proxies or affiliates thereof.
(2) The provision of such consulting services to covered
foreign entities may support efforts by certain foreign
governments to generate economic and military power that they
can then use to undermine the economic and national security of
the American people.
(3) It is a conflict of interest for consulting firms to
simultaneously aid in the efforts of certain foreign
governments to undermine the economic and national security of
the United States while they are simultaneously contracting
with Federal agencies responsible for protecting and defending
the United States from foreign threats.
(4) Firms should be prevented from engaging in such a
conflict of interest and should instead be required to choose
between aiding the efforts of certain foreign governments or
helping the United States Government to support and defend its
citizens.
SEC. 3. PROHIBITION ON FEDERAL CONTRACTING WITH ENTITIES THAT ARE
SIMULTANEOUSLY AIDING IN THE EFFORTS OF COVERED FOREIGN
ENTITIES.
(a) In General.--In order to end conflicts of interest in Federal
contracting among consulting firms that simultaneously contract with
the United States Government and covered foreign entities, the Federal
Acquisition Regulatory Council shall, not later than 1 year after the
date of the enactment of this Act, amend the Federal Acquisition
Regulation--
(1) to require any entity that makes an offer or quotation
to provide consulting services to an executive agency,
including services described in the North American Industry
Classification System's Industry Group code 5416, prior to
entering into a Federal contract, to certify that neither it
nor any of its subsidiaries or affiliates hold a consulting
contract with one or more covered foreign entities; and
(2) to prohibit Federal contracts for consulting services
from being awarded to an entity that provides consulting
services, including services described under the North American
Industry Classification System's Industry Group code 5416 if
the entity or any of its subsidiaries or affiliates are
determined, based on the self-certification required under
paragraph (1), to be a contractor of, or are otherwise
providing consulting services to, a covered foreign entity.
(b) Waiver.--
(1) In general.--Subject to the limitations in paragraph
(2), the head of an executive agency may waive the conflict of
interest restrictions under this section on a case-by-case
basis if--
(A) the agency head, in consultation with the
Secretary of Defense and the Director of National
Intelligence, determines the waiver to be in the
national security interests of the United States;
(B) the agency head determines that no other entity
without a conflict of interest under this section can
perform the work for the Federal contract;
(C) the head of the executive agency submits to the
Director of the Office of Management and Budget a
notification of such waiver at least 5 days prior to
issuing the waiver;
(D) the head of the executive agency submits to the
appropriate congressional committees a notification of
such waiver within 30 days in unclassified form
(accompanied by a classified annex if necessary) and
offers a briefing to those committees on the
information included in the notification; and
(E) the contracting agency publishes in an easily
accessible location on the agency's public website a
list of the names of the covered foreign entities to
which the entity receiving a waiver provides consulting
services, unless the head of the applicable executive
agency, with the approval of the Director of the Office
of Management and Budget, and in consultation with the
Secretary of Defense and Director of National
Intelligence, determines that such public disclosure
would directly harm the national security interests of
the United States.
(2) Limitations.--
(A) Duration.--A waiver granted under paragraph (1)
shall last for a period of not more than 365 days. The
head of the applicable executive agency, with the
approval of the Director of the Office of Management
and Budget, and in consultation with the Secretary of
Defense and Director of National Intelligence, may
extend a waiver granted under such paragraph one time,
for a period up to 180 days after the date on which the
waiver would otherwise expire, if such an extension is
in the national security interests of the United States
and the Director submits to the appropriate
congressional committees a notification of such waiver
and offers a briefing to those committees on the
information included in the notification.
(B) Number.--Not more than one total waiver across
all executive agencies may be granted under paragraph
(1) to a single entity at a given time.
(C) Notification requirements.--The notification
required under subparagraphs (C) and (D) of paragraph
(1) shall include the following information:
(i) Information on the contractor,
including--
(I) the name, address, and
corporate structure of the contractor;
(II) the name, address, and
corporate structure of any subsidiaries
or subcontractors involved;
(III) all foreign ownership of the
contractor;
(IV) all foreign real estate owned
by the contractor; and
(V) an employee designated as
responsible for managing any conflict
of interests that may arise as part of
the contract.
(ii) Information on the covered foreign
entities involved to the extent known by the
contractor, including--
(I) the name and address of the
covered foreign entity;
(II) the name and address of any
subsidiaries or subcontractors
involved;
(III) a complete history of any
contracts between the covered foreign
entity and the contractor;
(IV) all ownership of the covered
foreign entity; and
(V) any legal authorities providing
a foreign government with access or
control over the covered foreign
entity.
(iii) Information on the nature of the work
performed for the covered foreign entities,
including--
(I) the projected and actual dollar
value of the contract;
(II) the projected and actual
duration of the contract;
(III) the projected and actual
number of employees to work on the
contract;
(IV) the projected and actual
number of employees who are United
States citizens who work on the
contract;
(V) the projected and actual number
of employees who currently or formerly
held security clearances with the
United States Government who work on
the contract;
(VI) the subject matter of the
contract;
(VII) any materials provided to the
covered foreign entity in order to
secure the contract;
(VIII) any tracking number used by
the covered foreign entity to identify
the contract;
(IX) any tracking number or
information used by the contractor to
identify the contract; and
(X) any military or intelligence
applications that could benefit from
the contract.
(iv) Justification of the executive
agency's need for providing the waiver.
(v) An acceptable management oversight plan
to ensure that the work performed for the
covered foreign entities does not compromise
the work being performed for the Federal
Government or harm the national security of the
United States, to be approved at not lower than
the Deputy Secretary level at the contracting
agency.
(3) Contractor reporting.--The executive agency granting a
waiver under this subsection shall require the contractor, in
the event the contractor identifies any of the following during
the performance of the contract, to report the following
information to the executive agency:
(A) Any human rights violations that are known to
the contractor through information provided to the
contractor in the course of the contract.
(B) Any religious liberty violations that are known
to the contractor through information provided to the
contractor in the course of the contract.
(C) Any risks to United States economic or national
security identified by the contractor in the course of
the contract.
SEC. 4. PENALTIES FOR FALSE INFORMATION.
(a) Termination, Suspension, and Debarment.--If the head of an
executive agency determines that a consulting firm described in section
3(a)(1) has knowingly submitted a false certification or information on
or after the date on which the Federal Acquisition Regulatory Council
amends the Federal Acquisition Regulation pursuant to such section, the
head of the executive agency shall terminate the contract with the
consulting firm and consider suspending or debarring the firm from
eligibility for future Federal contracts in accordance with subpart 9.4
of the Federal Acquisition Regulation.
(b) False Claims Act.--A consulting firm described in section
3(a)(1) that, for the purposes of the False Claims Act, knowingly hides
or misrepresents one or more contracts with covered foreign entities,
or otherwise violates the False Claims Act, shall be subject to the
penalties and corrective actions described in the False Claims Act,
including liability for three times the amount of damages which the
United States Government sustains.
SEC. 5. DEFINITIONS.
In this Act:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means the Committee on
Homeland Security and Governmental Affairs of the Senate and
the Committee on Oversight and Accountability of the House of
Representatives.
(2) Consulting services.--The term ``consulting services''
means advisory or assistance services similar to those defined
in Federal Acquisition Regulation 2.101, but for the purposes
of this Act includes services provided to covered foreign
entities, except that the term does not include the provision
of products or services related to--
(A) compliance with legal, audit, accounting, tax,
reporting, or other requirements of the laws and
standards of countries; or
(B) participation in a judicial, legal, or
equitable dispute resolution proceeding.
(3) Covered foreign entity.--The term ``covered foreign
entity'' means any of the following:
(A) The Government of the People's Republic of
China, the Chinese Communist Party, the People's
Liberation Army, the Ministry of State Security, or
other security service or intelligence agency of the
People's Republic of China.
(B) The Government of the Russian Federation or any
entity sanctioned by the Secretary of the Treasury
under Executive Order 13662 titled ``Blocking Property
of Additional Persons Contributing to the Situation in
Ukraine'' (79 Fed. Reg. 16169).
(C) The government of any country if the Secretary
of State determines that such government has repeatedly
provided support for acts of international terrorism
pursuant to any of the following:
(i) Section 1754(c)(1)(A) of the Export
Control Reform Act of 2018 (50 U.S.C.
4318(c)(1)(A)).
(ii) Section 620A of the Foreign Assistance
Act of 1961 (22 U.S.C. 2371).
(iii) Section 40 of the Arms Export Control
Act (22 U.S.C. 2780).
(iv) Any other provision of law.
(D) Any entity included on any of the following
lists maintained by the Department of Commerce:
(i) The Entity List set forth in Supplement
No. 4 to part 744 of the Export Administration
Regulations.
(ii) The Denied Persons List as described
in section 764.3(a)(2) of the Export
Administration Regulations.
(iii) The Unverified List set forth in
Supplement No. 6 to part 744 of the Export
Administration Regulations.
(iv) The Military End User List set forth
in Supplement No. 7 to part 744 of the Export
Administration Regulations.
(E) Any entity identified by the Secretary of
Defense pursuant to section 1237(b) of the Strom
Thurmond National Defense Authorization Act for Fiscal
Year 1999 (Public Law 105-261; 50 U.S.C. 1701 note).
(F) Any entity on the Non-SDN Chinese Military-
Industrial Complex Companies List (NS-CMIC List)
maintained by the Office of Foreign Assets Control of
the Department of the Treasury under Executive Order
14032 (86 Fed. Reg. 30145; relating to addressing the
threat from securities investments that finance certain
companies of the People's Republic of China), or any
successor order.
(4) Executive agency.--The term ``executive agency'' has
the meaning given the term in section 133 of title 41, United
States Code.
(5) False claims act.--The term ``False Claims Act'' means
sections 3729 through 3733 of title 31, United States Code.
(6) North american industry classification system's
industry group code 5416.--The term ``North American Industry
Classification System's Industry Group code 5416'' refers to
the North American Industry Classification System category that
covers Management, Scientific, and Technical Consulting
Services as Industry Group code 5416, including industry codes
54151, 541611, 541612, 541613, 541614, 541618, 54162, 541620,
54169, and 541690.
SEC. 6. NO ADDITIONAL FUNDING.
No additional funds are authorized to be appropriated for the
purpose of carrying out this Act.
Amend the title so as to read: ``A bill to prohibit
conflicts of interest among consulting firms that
simultaneously contract with covered foreign entities and the
United States Government, and for other purposes.''.
Calendar No. 734
118th CONGRESS
2d Session
S. 3810
[Report No. 118-314]
_______________________________________________________________________
A BILL
To prohibit conflict of interests among consulting firms that
simultaneously contract with the Government of the People's Republic of
China and the United States Government, and for other purposes.
_______________________________________________________________________
December 19 (legislative day, December 16), 2024
Reported with an amendment and an amendment to the title