Prohibition on contracting with certain consultancies

(a)

Findings

Congress makes the following findings:(1)The reliance by the Department of Defense on consultants for mission support services can create potential organizational conflicts of interest related to national security matters due to competing interests as a result of business relationships with foreign adversarial nations and entities.(2)It is imperative for consultants providing mission support services to the Department of Defense related to national security matters and foreign policy interests to not be providing mission support services to foreign adversaries regarding efforts counter to the national security and foreign policy interests of the United States.(3)Protecting against organizational conflicts of interest related to foreign adversarial nations and entities providing Federal mission support services is essential to the national security and foreign policy interests of the United States.(b)

Prohibition related to certain contracts or grants

(1)

In general

The Secretary may not after the date of the enactment of this Act enter into, renew, extend a contract with, award a grant to, enter into an other transactional agreement with, or otherwise effectuate any legal instrument resulting in any financial benefit accruing to, a covered consultancy.(2)

Disclosure

Any individual or entity that submits an offer or bid to provide consulting services to the Department of Defense shall disclose in such offer or bid any information relevant to the individual or entity with respect to the prohibition under paragraph (1), including—(A)whether the individual or entity has entered into a contract with, or received grants or other financial awards from, a covered entity in the five years prior to submitting the offer or bid; and(B)at the time the contract to provide consulting services to the Department will be entered into, whether—(i)any contract entered into by the individual or entity with a covered entity will still be in effect; or(ii)the individual or entity will be receiving funds from, or have any unobligated or unexpended funds received under, any grant or other financial award from a covered entity.(3)

Penalties

(A)

In general

If the Secretary determines that a contractor of the Department failed to make the disclosure required by paragraph (2), the Secretary shall—(i)terminate the applicable contract for cause; and(ii)initiate a suspension and debarment proceeding with respect to the contractor.(B)

Maximum length of debarment

The maximum length of a debarment of a contractor pursuant to this paragraph shall be a period of 5 years.(c)

Certification

(1)

In general

After a determination by the Secretary that a company is a covered consultancy, such company may submit to the Secretary a written and signed certification that—(A)the consultancy no longer is—(i)performing under a contract with a covered entity;(ii)carrying out activities under a grant received from a covered entity; or(iii)receiving funds, or has any unobligated or unexpended funds received, from a covered entity; and(B)will not enter into, accept, or pursue a contract with a covered entity or a grant or other financial award from a covered entity—(i)during the term of a contract with the Department of Defense; or(ii)while receiving funds from the Department of Defense, or obligating or expending any such funds.(2)

Status change

Upon the approval by the Secretary of a certification submitted under paragraph (1), a company is deemed to not be a covered consultancy for the purposes of this section until the expiration of the certification under paragraph (3).(3)

Expiration

A certification submitted by a company under paragraph (1) shall expire on the earlier of the date on which the company, after submitting such certification, enters into, extends, renews, or performs under a contract with a covered entity for consulting services.(d)

Policies and guidance

Not later than 180 days after the date of the enactment of this Act, the Secretary shall issue the following policies and practices:(1)Policies to implement the prohibition under subsection (b)(1).(2)Best practices for consultancies to avoid becoming covered consultancies under this section and for covered consultancies to end their status as such.(3)A policy articulating the exact provisions and terms to be included in solicitations, contracts, and grants of the Department of Defense pursuant to paragraphs (2) and (3) of subsection (b).(e)

Revision of Department of Defense acquisition regulation

Not later than one year after the date of enactment of this Act, the Secretary shall amend the Defense Federal Acquisition Regulation Supplement to implement this section.(f)

Definitions

In this section:(1)

Consulting services

The term consulting services has the meaning given the term advisory and assistance services in section 2.101 of the Federal Acquisition Regulation, except that—(A)the term does not include the services described in paragraph (3) of such section; and(B)each instance of the term Federal is replaced with client.(2)

Contract employee

The term contract employee means—(A)an employee of a contractor; or(B)in the case of a contractor who is an individual who directly enters into a contract with the Federal Government, that individual.(3)

Contractor

The term contractor has the meaning given the term in section 7101 of title 41, United States Code.(4)

Covered consultancy

The term covered consultancy means a company that, itself or any subsidiary or affiliate thereof, in the later of the five-year period preceding the date of the relevant requirement or the effective date of the relevant requirement—(A)failed to disclose information to the Secretary related to any activities involving a covered entity as required by any law, regulation, or contract term, or terms of other agreements;(B)was found to have submitted false or misleading information to any Federal agency in any Federal proceeding; or(C)was found to have failed to disclose an actual or potential conflict of interest as required by any law, regulation, or contract term to any Federal agency or in any Federal proceeding.(5)

Covered entity

The term covered entity means any of the following:(A)The Government of the People’s Republic of China.(B)The Chinese Communist Party.(C)The People’s Liberation Army, the Ministry of State Security, or any security service or intelligence agency of the People’s Republic of China.(D)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.(E)Any Chinese military company 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 owned (25 percent or more) or controlled, directly or indirectly, by the Government of the People’s Republic of China or the Chinese Communist Party, including through board representation, voting rights, contractual arrangements, or other means of effective control, that is engaged in one or more national security industries.(G)The Government of the Russian Federation, any entity owned (25 percent or more) or controlled, directly or indirectly by the Russian Federation, or any entity sanctioned by the Secretary of the Treasury.(H)The government or any State-owned entity of any country if the Secretary of State determines that such government has repeatedly provided support for acts of international terrorism pursuant to—(i)section 1754(c)(1)(A) of the Export Control Reform Act of 2018 (50 U.S.C. 4813(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); or(iv)any other provision of law.(I)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.(J)The Military End User List set forth in Supplement No. 7 to part 744 of the Export Administration Regulations.(K)A foreign adversary, as that term is defined in this subsection.(L)An individual or entity included on any sanctions list administered by the Office of Foreign Assets Control of the Department of the Treasury or of the Department of Justice, including any successor list.(6)

Export administration regulations

The term Export Administration Regulations means the regulations set forth in subchapter C of chapter VII of title 15, Code of Federal Regulations.(7)

Foreign adversary

The term foreign adversary means the following:(A)The Democratic People’s Republic of North Korea.(B)The People’s Republic of China.(C)The Russian Federation.(D)The Islamic Republic of Iran.(E)The Republic of Cuba.(F)Venezuelan politician Nicolás Maduro (the Maduro Regime).(8)

National security industry

The term national security industry means—(A)a military-related industry;(B)semiconductor production;(C)researching or commercializing quantum computing;(D)developing artificial intelligence products or services;(E)the biotechnology industry;(F)the cybersecurity industry;(G)the mining, processing, or refining of critical minerals (as such term is defined in section 7002(a) of the Energy Act of 2020 (30 U.S.C. 1606(a))) for use by a covered entity; or (H) other emerging technologies (as that term is defined in section 6701 of the Intelligence Authorization Act for Fiscal Year 2023 (division F of Public Law 117–263; 50 U.S.C. 3024 note)). (9)

Secretary

The term Secretary means the Secretary of Defense.