Protecting Our Homeland from Chinese Espionage Act

To require disclosure by Department of Homeland Security contractors of contracts with Chinese entities, and for other purposes. 1. Short title This Act may be cited as the Protecting Our Homeland from Chinese Espionage Act 2. Requirement for Department of Homeland Security contractors to disclose contracts and ties with People’s Republic of China entities (a) Requirement (1) Initial disclosure (A) In general Not later than 12 months after the date of the enactment of this Act, the Secretary of Homeland Security shall amend the Homeland Security Acquisition Regulation to require that a contractor with the Department of Homeland Security shall, as a condition of being awarded a contract for the procurement of goods or services, disclose to the Department covered information related to any contracts or other relevant commercial ties with a covered entity such contractor, including the immediate owner of such contractor, the highest-level owner of such contractor, and all first tier subcontractors of such contractor with respect to the contract to be awarded— (i) has that are in effect at the time of contract award; (ii) has had within the three years immediately preceding such time of contract award; and (iii) enters into at any time during the period of such contract award. (B) Notification The Secretary of Homeland Security shall notify the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Homeland Security of the House of Representatives of disclosures described in subparagraph (A). (2) Updated disclosures (A) New or renewal A contractor awarded a contract with the Department of Homeland Security in accordance with the amended Homeland Security Acquisition Regulation pursuant to paragraph (1) shall update disclosures made to the Department in accordance with such paragraph not later than 30 days after such contractor, including the immediate owner of such contractor, the highest-level owner of such contractor, and all first tier subcontractors of such contractor with respect to such contract, enters into or renews a contract with a covered entity. (B) Annual A contractor awarded a contract with the Department of Homeland Security in accordance with the amended Homeland Security Acquisition Regulation pursuant to paragraph (1) shall annually update disclosures made to the Department in accordance with such paragraph. (C) Notification The Secretary of Homeland Security shall notify the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Homeland Security of the House of Representatives of updated disclosures under subparagraphs (A) and (B). (3) Exceptions Disclosure and notification requirements under this section shall not apply in the case of any of the following: (A) If the procurement that is the subject of the contract at issue is in an amount at or below the simplified acquisition threshold, as that term in defined under section 134 of title 41, United States Code, and adjusted for inflation under section 1908 of such title. (B) Any supply or service contract the Secretary of Homeland Security, in consultation with the Chief Acquisition Officer, Chief Procurement Officer, and Chief Security Officer of the Department of Homeland Security, determines to be low risk. (C) If the procurement that is the subject of the contract at issue is already under investigation by the Department of Homeland Security or another United States Government agency and with respect to which such a disclosure or notification would compromise the integrity of such investigation. (b) Database of Federal contractor contracts with covered entities (1) In general Not later than 180 days after the date of the enactment of this Act, the Secretary of Homeland Security shall establish a public database containing the information concerning contracts with covered entities disclosed pursuant to subsection (a). Upon the termination or completion of such a contract, the contractor with respect to such a contract, including the immediate owner of such contractor, the highest-level owner of such contractor, and all first-tier subcontractors of such contractor, shall be eligible for removal from such public database. (2) Exception Paragraph (1) shall not apply in the case of contracts with respect to which compliance with such paragraph would compromise national security or if information otherwise subject to disclosure is classified pursuant to Executive Order 13526. (c) Authority To withhold or terminate contracts The Secretary of Homeland Security shall terminate an existing contract if the Secretary determines based on a disclosure made by the contractor, the immediate owner of such contractor, the highest-level owner of such contractor, or a first-tier subcontractor of such contractor, that continuation of such contract violates Federal law or is not in the public’s interest. (d) Suspension and debarment Based on information disclosed pursuant to this section, the Secretary of Homeland Security may refer a contractor, the immediate owner of such contractor, the highest-level owner of such contractor, or a first-tier subcontractor of such contractor, as appropriate, to the Suspension and Debarment official of the Department of Homeland Security for suspension or debarment, to initiate a suspension or debarment proceeding, as such official determines appropriate. (c) Definitions In this section: (1) Covered entity The term covered entity (A) the Government of the People’s Republic of China; (B) the Chinese Communist Party (CCP); (C) the Chinese military; (D) an entity owned, directed, controlled, financed, or influenced directly or indirectly, through separate contracts or otherwise, by the Government of the People’s Republic of China, the CCP, or the Chinese military, in which the Government of the People’s Republic of China, the CCP, or the Chinese military has majority ownership or control or has minority ownership greater than ten percent of such entity, including any entity for which the Government of the People’s Republic of China, the CCP, or the Chinese military has the ability, through ownership of a majority or a dominant minority of the total outstanding voting interest in an entity, board representation, proxy voting, a special share, contractual arrangements, formal or informal arrangements to act in concert, or other means, to determine, direct, or decide for an entity an important matter; (E) a parent, subsidiary, or affiliate of an entity described in subparagraph (D); and (F) an China-based entity with a majority ownership or control or with minority ownership greater than ten percent by a covered entity, substantively involved in People’s Republic of China economic or industrial policies or military-civil fusion, including by accepting funding, performing services, or receiving subsidies, or with responsibilities for overseeing economic development projects, including Made in China 2025 and the Belt and Road Initiative. (2) Covered information The term covered information (A) the name of the covered entity; (B) the extent to which the covered entity has the ability to act in concert or to determine, direct, or decide an important matter for a contractor, including the immediate owner of such contractor, the highest-level owner of such contractor, and all first tier subcontractors of such contractor under the awarded contract, through ownership of a majority or a dominant minority of the total outstanding voting interest, board representation, proxy voting, special interest share, contractual arrangements, or other formal or informal arrangements; (C) the date such contract was entered into; and (D) the duration, including any extensions, of such contract. (3) Immediate owner The term immediate owner (A) Ownership or interlocking management. (B) Identity of interests among family members. (C) Shared facilities and equipment. (D) Common use of employees. (4) Highest-level owner The term highest-level owner

Summary: Protecting Our Homeland from Chinese Espionage Act This bill requires Department of Homeland Security (DHS) contractors to disclose relevant commercial ties with covered Chinese entities. DHS must terminate a contract with a contractor if, based on a disclosure required by this bill, DHS determines that continuation of the contract violates federal law or is not in the public's interest. The bill defines covered entity to include the Chinese government, the Chinese Communist Party, the Chinese military, and entities that have certain connections to China.