US senators push for stronger conflict of interest rules for federal contractors

18 July 2022 2 min. read

A bipartisan group of US senators has drafted a bill that would impose stricter rules for consulting firms contracting with federal agencies – and would force them to disclose work with foreign adversaries.

Introduced on Wednesday, the CONSULT Act (Combating Obstructive National Security Underreporting of Legitimate Threats), would require consultancies to disclose potential conflicts of interest with foreign governments or entities deemed adversaries to the United States, including Russia, China, and Iran. Firms would have to disclose active contracts, contracts held in the last five years, and other relevant information.

Previous or concurrent work that is deemed a conflict would be grounds for denial of a federal contract, and failure to disclose conflicts could result in suspension of contracts and disbarment from future contracts. 

The bill was sponsored by Sens. Joni Ernst, R-Iowa; Gary Peters, D-Mich.; and Maggie Hassan, D-N.H.

US senators push for stronger conflict of interest rules for federal contractors

“America’s adversaries, like China and Russia, are aggressively working against our national security interests, so why then would we allow government contractors closely tied to these adversaries to advise our military and Pentagon officials?” Ernst told NBC News. “At the very least, this is a clear conflict of interest, but more seriously, it could pose a threat to our national security.”

Impetus for the bill arose after an NBC News investigation uncovered that McKinsey & Company advised Russian and Chinese state-owned companies at the same time it was advising the Pentagon and the intelligence community.

McKinsey rejected assertions of conflict of interest, citing strict internal rules and firewalls. “As we have stated previously, McKinsey complies with all applicable U.S. contracting laws, including those regarding conflicts of interest. When we serve the U.S. government, we do so through a separate legal entity with separate operational structures and separate information technology where required,” a company spokesperson said in May.

There are no allegations that McKinsey has violated contracting laws or compromised US national security in its work with Russian and Chinese entities.