CONSULT Act of 2023

II 118TH CONGRESS 1ST SESSION S. 2034 To require the Secretary of Defense to develop procurement policy and guid- ance to mitigate consulting company conflict of interests related to na- tional security and foreign policy. IN THE SENATE OF THE UNITED STATES JUNE 15, 2023 Ms. ERNST (for herself, Mr. KELLY, and Ms. HASSAN) introduced the fol- lowing bill; which was read twice and referred to the Committee on Homeland Security and Governmental Affairs A BILL To require the Secretary of Defense to develop procurement policy and guidance to mitigate consulting company con- flict of interests related to national security and foreign policy. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Combating Obstructive 4 National Security Underreporting of Legitimate Threats 5 Act of 2023’’ or the ‘‘CONSULT Act of 2023’’. 6 VerDate Sep 11 2014 03:11 Jul 12, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2034.IS S2034 kjohnson on DSK79L0C42PROD with BILLS 2 •S 2034 IS SEC. 2. ORGANIZATIONAL CONFLICT OF INTERESTS RELAT- 1 ING TO NATIONAL SECURITY AND FOREIGN 2 POLICY. 3 (a) FINDINGS.—Congress makes the following find- 4 ings: 5 (1) The reliance by the Department of Defense 6 on consultants for mission support services can cre- 7 ate potential organizational conflicts of interest re- 8 lated to national security matters due to competing 9 interests as a result of business relationships with 10 foreign adversarial nations and entities. 11 (2) It is imperative for consultants providing 12 mission support services to the Department of De- 13 fense related to national security matters and for- 14 eign policy interests to not be providing mission sup- 15 port services to foreign adversaries regarding efforts 16 counter to the national security and foreign policy 17 interests of the United States. 18 (3) Protecting against organizational conflicts 19 of interest related to foreign adversarial nations and 20 entities providing Federal mission support services is 21 essential to the national security and foreign policy 22 interests of the United States. 23 (b) PROHIBITION RELATED TO CERTAIN CONTRACTS 24 OR GRANTS.— 25 VerDate Sep 11 2014 03:11 Jul 12, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2034.IS S2034 kjohnson on DSK79L0C42PROD with BILLS 3 •S 2034 IS (1) IN GENERAL.—The Secretary may not after 1 the date of the enactment of this Act enter into, 2 renew, or extend a contract with, or award a grant 3 to, a covered consultancy. 4 (2) DISCLOSURE.—Any individual or entity that 5 submits an offer or bid for a contract to provide con- 6 sulting services to the Department of Defense shall 7 disclose in such offer or bid any information relevant 8 to the individual or entity with respect to the prohi- 9 bition under paragraph (1), including— 10 (A) whether the individual or entity has 11 entered into a contract with, or received grants 12 or other financial awards from, a covered entity 13 in the five years prior to submitting the offer 14 or bid; and 15 (B) at the time the contract to provide 16 consulting services to the Department will be 17 entered into, whether— 18 (i) any contract entered into by the 19 individual or entity with a covered entity 20 will still be in effect; and 21 (ii) the individual or entity will be re- 22 ceiving funds from, or have any unobli- 23 gated or unexpended funds received under, 24 VerDate Sep 11 2014 03:11 Jul 12, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2034.IS S2034 kjohnson on DSK79L0C42PROD with BILLS 4 •S 2034 IS any grant or other financial award from a 1 covered entity. 2 (3) PENALTIES.— 3 (A) IN GENERAL.—If the Secretary deter- 4 mines that a contractor of the Department 5 failed to make the disclosure required by para- 6 graph (2), the Secretary shall— 7 (i) terminate the applicable contract 8 for cause; and 9 (ii) initiate a suspension and debar- 10 ment proceeding with respect to the con- 11 tractor. 12 (B) MAXIMUM LENGTH OF DEBARMENT.— 13 The maximum length of a debarment of a con- 14 tractor under this paragraph shall be a period 15 of 5 years. 16 (c) CERTIFICATION.— 17 (1) IN GENERAL.—After a determination by the 18 Secretary that a company is a covered consultancy, 19 such company may submit to the Secretary a written 20 and signed certification that— 21 (A) the consultancy no longer is— 22 (i) performing under a contract with a 23 covered entity; 24 VerDate Sep 11 2014 03:11 Jul 12, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2034.IS S2034 kjohnson on DSK79L0C42PROD with BILLS 5 •S 2034 IS (ii) carrying out activities under a 1 grant received from a covered entity; or 2 (iii) receiving funds, or have any un- 3 obligated or unexpended funds received, 4 from a covered entity; and 5 (B) will not receive or pursue a contract 6 with a covered entity or a grant or other finan- 7 cial award from a covered entity— 8 (i) during the term of a contract with 9 the Department of Defense; or 10 (ii) while receiving funds from the De- 11 partment of Defense, or obligating or ex- 12 pending any such funds. 13 (2) STATUS CHANGE.—Upon the approval by 14 the Secretary of a certification submitted under 15 paragraph (1), a company is deemed to not be a cov- 16 ered consultancy until the expiration of the certifi- 17 cation under paragraph (3). 18 (3) EXPIRATION.—A certification submitted by 19 a company under paragraph (1) shall expire on the 20 earlier of the date on which the company, after sub- 21 mitting such certification enters into, extends, re- 22 news, or performs under a contract with a covered 23 entity for consulting services. 24 VerDate Sep 11 2014 03:11 Jul 12, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2034.IS S2034 kjohnson on DSK79L0C42PROD with BILLS 6 •S 2034 IS (d) GUIDANCE.—The Secretary shall issue procure- 1 ment policies for the Department of Defense as follows: 2 (1) Policies to implement the prohibition under 3 subsection (b)(1). 4 (2) Best practices to avoid becoming covered 5 consultancies under this section and for covered 6 consultancies to end their status as such. 7 (3) A policy articulating the exact provisions 8 and terms relating to the requirements of para- 9 graphs (2) and (3) of subsection (b) to be included 10 in solicitations, contracts, and grants of the Depart- 11 ment. 12 (e) REVISION OF DEPARTMENT OF DEFENSE ACQUI- 13 SITION REGULATION.—Not later than one year after the 14 date of the enactment of this Act, the Secretary shall re- 15 vise the Defense Federal Acquisition Regulation Supple- 16 ment to implement this section. 17 (f) DEFINITIONS.—In this section: 18 (1) CONSULTING SERVICES.—The term ‘‘con- 19 sulting services’’ has the meaning given the term 20 ‘‘advisory and assistance services’’ in section 2.101 21 of the Federal Acquisition Regulation, except that— 22 (A) the term does not include the services 23 described in paragraph (3) of such section; and 24 VerDate Sep 11 2014 03:11 Jul 12, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2034.IS S2034 kjohnson on DSK79L0C42PROD with BILLS 7 •S 2034 IS (B) each instance of the term ‘‘Federal’’ is 1 replaced with ‘‘client’’. 2 (2) COVERED CONSULTANCY.—The term ‘‘cov- 3 ered consultancy’’ means a company that, itself or 4 any subsidiary or affiliate thereof, in immediately 5 preceding one year period entered into, extended, re- 6 newed, or performed under a contract with a covered 7 entity for consulting services. 8 (3) COVERED ENTITY.—The term ‘‘covered en- 9 tity’’ means any of the following: 10 (A) The Government of the People’s Re- 11 public of China. 12 (B) The Chinese Communist Party. 13 (C) The People’s Liberation Army, the 14 Ministry of State Security, or other security 15 service or intelligence agency of the People’s 16 Republic of China. 17 (D) Any entity on the Non-SDN Chinese 18 Military-Industrial Complex Companies List 19 (NS–CMIC–List) maintained by the Office of 20 Foreign Assets Control of the Department of 21 the Treasury under Executive Order 14032 (86 22 Fed. Reg. 30145; relating to addressing the 23 threat from securities investments that finance 24 VerDate Sep 11 2014 03:11 Jul 12, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2034.IS S2034 kjohnson on DSK79L0C42PROD with BILLS 8 •S 2034 IS certain companies of the People’s Republic of 1 China), or any successor order. 2 (E) Any Chinese military company identi- 3 fied by the Secretary of Defense pursuant to 4 section 1237(b) of the Strom Thurmond Na- 5 tional Defense Authorization Act for Fiscal 6 Year 1999 (Public Law 105–261; 50 U.S.C. 7 1701 note). 8 (F) Any Chinese State-owned entity or 9 other entity under the ownership, or control, di- 10 rectly or indirectly, of the Government of the 11 People’s Republic of China or the Chinese Com- 12 munist Party that is engaged in one or more 13 national security industries. 14 (G) The Government of the Russian Fed- 15 eration, any Russian State-owned entity, or any 16 entity sanctioned by the Secretary of the Treas- 17 ury under Executive Order 13662 titled ‘‘Block- 18 ing Property of Additional Persons Contrib- 19 uting to the Situation in Ukraine’’(79 Fed. 20 Reg. 16169). 21 (H) The government or any State-owned 22 entity of any country if the Secretary of State 23 determines that such government has repeat- 24 VerDate Sep 11 2014 03:11 Jul 12, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2034.IS S2034 kjohnson on DSK79L0C42PROD with BILLS 9 •S 2034 IS edly provided support for acts of international 1 terrorism pursuant to— 2 (i) section 1754(c)(1)(A) of the Ex- 3 port Control Reform Act of 2018 (50 4 U.S.C. 4318(c)(1)(A)); 5 (ii) section 620A of the Foreign As- 6 sistance Act of 1961 (22 U.S.C. 2371); 7 (iii) section 40 of the Arms Export 8 Control Act (22 U.S.C. 2780); or 9 (iv) any other provision of law. 10 (I) Any entity included on any of the fol- 11 lowing lists maintained by the Department of 12 Commerce: 13 (i) The Entity List set forth in Sup- 14 plement No. 4 to part 744 of the Export 15 Administration Regulations. 16 (ii) The Denied Persons List as de- 17 scribed in section 764.3(a)(2) of the Ex- 18 port Administration Regulations. 19 (iii) The Unverified List set forth in 20 Supplement No. 6 to part 744 of the Ex- 21 port Administration Regulations. 22 (J) The Military End User List set forth 23 in Supplement No. 7 to part 744 of the Export 24 Administration Regulations. 25 VerDate Sep 11 2014 03:11 Jul 12, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2034.IS S2034 kjohnson on DSK79L0C42PROD with BILLS 10 •S 2034 IS (4) EXPORT ADMINISTRATION REGULATIONS.— 1 The term ‘‘Export Administration Regulations’’ 2 means the regulations set forth in subchapter C of 3 chapter VII of title 15, Code of Federal Regulations. 4 (5) NATIONAL SECURITY INDUSTRY.—The term 5 ‘‘national security industry’’ means— 6 (A) a military-related industry; 7 (B) semiconductor production; 8 (C) researching or commercializing quan- 9 tum computing; 10 (D) producing products or services that 11 use artificial intelligence; 12 (E) the biotechnology industry; 13 (F) the cybersecurity industry; or 14 (G) the mining, processing, or refining of 15 critical minerals (as such term is defined in sec- 16 tion 7002(a) of the Energy Act of 2020 (30 17 U.S.C. 1606(a))) for use by a covered entity. 18 (6) SECRETARY.—The term ‘‘Secretary’’ means 19 the Secretary of Defense. 20 Æ VerDate Sep 11 2014 03:11 Jul 12, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\S2034.IS S2034 kjohnson on DSK79L0C42PROD with BILLS