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[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
```