[Congressional Record Volume 168, Number 194 (Wednesday, December 14, 2022)]
[House]
[Pages H9837-H9839]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  1900
PREVENTING ORGANIZATIONAL CONFLICTS OF INTEREST IN FEDERAL ACQUISITION 
                                  ACT

  Mr. DeSAULNIER. Mr. Speaker, pursuant to House Resolution 1518, I 
call up the bill (S. 3905) to prevent organizational conflicts of 
interest in Federal acquisition, and for other purposes, and ask for 
its immediate consideration.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Pursuant to House Resolution 1518, the bill 
is considered read.
  The text of the bill is as follows:

                                S. 3905

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Preventing Organizational 
     Conflicts of Interest in Federal Acquisition Act''.

     SEC. 2. PREVENTING ORGANIZATIONAL CONFLICTS OF INTEREST IN 
                   FEDERAL ACQUISITION.

       (a) In General.--Not later than 18 months after the date of 
     the enactment of this Act, the Federal Acquisition Regulatory 
     Council shall revise the Federal Acquisition Regulation--
       (1) to provide and update--
       (A) definitions related to specific types of organizational 
     conflicts of interest, including unequal access to 
     information, impaired objectivity, and biased ground rules;
       (B) definitions, guidance, and illustrative examples 
     related to relationships of contractors with public, private, 
     domestic, and foreign entities that may cause contract 
     support to be subject to potential organizational conflicts 
     of interest, including undue influence; and
       (C) illustrative examples of situations related to the 
     potential organizational conflicts of interest identified 
     under this paragraph, including an example of the awarding by 
     a Federal regulatory agency of a contract for consulting 
     services to a contractor if employees of the contractor 
     performing work under such contract are permitted by the 
     contractor to simultaneously perform work under a contract 
     for a private sector client under the regulatory purview of 
     such agency;
       (2) to provide executive agencies with solicitation 
     provisions and contract clauses to avoid or mitigate 
     organizational conflicts of interest, for agency use as 
     needed, that require contractors to disclose information 
     relevant to potential organizational conflicts of interest 
     and limit future contracting with respect to potential 
     conflicts of interest with the work to be performed under 
     awarded contracts;
       (3) to allow executive agencies to tailor such solicitation 
     provisions and contract clauses as necessary to address risks 
     associated with conflicts of interest and other 
     considerations that may be unique to the executive agency;
       (4) to require executive agencies--
       (A) to establish or update as needed agency conflict of 
     interest procedures to implement the revisions to the Federal 
     Acquisition Regulation made under this section; and
       (B) to periodically assess and update such procedures as 
     needed to address agency-specific conflict of interest 
     issues; and
       (5) to update the procedures set forth in section 9.506 of 
     the Federal Acquisition Regulation to permit contracting 
     officers to take into consideration professional standards 
     and procedures to prevent organizational conflicts of 
     interest to which an offeror or contractor is subject.
       (b) Executive Agency Defined.--In this section, the term 
     ``executive agency'' has the meaning given the term in 
     section 133 of title 41, United States Code.

  The SPEAKER pro tempore. The bill shall be debatable for 1 hour 
equally divided and controlled by the chair and ranking minority member 
of the Committee on Oversight and Reform or their respective designees.
  The gentleman from California (Mr. DeSaulnier) and the gentleman from 
Pennsylvania (Mr. Keller) each will control 30 minutes.
  The Chair recognizes the gentleman from California (Mr. DeSaulnier).
  General Leave
  Mr. DeSAULNIER. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days in which to revise and extend their remarks 
and include extraneous material on the measure before us.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  Mr. DeSAULNIER. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, S. 3905, the Preventing Organizational Conflicts of 
Interest in Federal Acquisition Act, which was introduced by Senator 
Gary Peters, chairman of the Senate Homeland Security and Governmental 
Affairs Committee, has strong bipartisan support and passed the Senate 
this summer with unanimous consent.
  In April, we introduced a companion bill, H.R. 7602, following one of 
the Oversight Committee's investigations, which highlighted the need to 
strengthen government contracting laws on conflicts of interest.
  The committee's investigation found that a consulting contractor 
advised the Food and Drug Administration at the same time they were 
advising private-sector clients that were regulated by the FDA. Many 
times, it was the exact same consultants advising the FDA and private-
sector clients on the same issue.
  In this case, the consultant failed to follow the rules on disclosing 
these amazing conflicts, collecting millions of dollars from both the 
regulator and the private-sector client.
  Although this is one extreme example, other organizational conflicts 
of interest, large and small, occur across government. The Government 
Accountability Office regularly fields bid protests involving 
organizational conflicts of interest.
  In 2014, a major defense contractor paid a settlement for allegedly 
failing to disclose conflicts while advising the Nuclear Regulatory 
Commission.
  Organizational conflicts of interest can occur when a contractor's 
competing interests raise questions about their ability to provide 
impartial advice to the government. It is crucial that government 
contractors are providing impartial advice, particularly when the 
government is paying for their expertise and objectivity on sensitive 
matters.
  The rules on organizational conflicts of interest have not changed 
significantly since the 1990s. This bill would make long-overdue 
revisions to strengthen these rules.
  The current rules set basic standards to prevent organizational 
conflicts of interest but leave the details up to individual agencies. 
The current patchwork system creates the risk of egregious breaches of 
the public trust.
  In 2009, Congress asked for the organizational conflict of interest 
rules to be reassessed. Draft rules were issued, but the reform effort 
was eventually abandoned, and the rules were never finalized.
  This bill requires the revisions that were then started to be 
completed. This bill would also mandate that rules on government 
contractor conflicts are thoroughly revised and ensure that there is a 
uniform set of standards.
  These reforms will help government contractors as well by ensuring 
clarity

[[Page H9838]]

and consistency across the executive branch. This is especially 
beneficial to contractors working for multiple agencies.
  It is outrageous that a contractor would be allowed to advise 
government regulators at the same time they are advising the industry 
that is being regulated.
  If we do not take steps to prevent conflicts of interest, and thereby 
safeguard the integrity of government decisionmaking and operations, 
then we risk potentially serious breaches in the public trust.
  Mr. Speaker, I strongly support this bill, and I reserve the balance 
of my time.
  Mr. KELLER. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in opposition to S. 3905, the Preventing 
Organizational Conflicts of Interest in Federal Acquisition Act, for 
the simple reason that it is unnecessary legislation.
  The Federal Acquisition Regulation already contains provisions 
targeting conflicts of interest. The FAR includes specific examples of 
what is a conflict of interest. The FAR includes guidance for agencies 
to add contract clauses addressing conflicts that might arise.
  Therefore, it seems we are telling the Federal Acquisition Regulation 
Council, the body responsible for Federal acquisition policy, to do 
something it is already doing.
  As a result, this legislation will cause the FAR Council to do work 
it does not need to be doing, but they will surely feel compelled to 
produce something in the way of new regulations. That means it will 
become even more difficult for companies to do business with the 
Federal Government, and it is complicated enough as it is.
  There are concerns that companies, especially small businesses, are 
deciding not to do business with the Federal Government because it is 
just too complicated.
  From a process perspective, Oversight Committee Democrats marked up 
this bill without any hearings with relevant agency officials to 
determine if this legislation was truly necessary. My Democrat 
committee colleagues may point to their report regarding one specific 
company of concern and argue that was proof enough that we need to 
legislate in this already crowded space, but a simple case study is not 
a solid foundation for governmentwide legislation impacting all Federal 
contractors.
  If there are issues with agencies enforcing existing conflicts of 
interest requirements, then Congress needs to conduct oversight over 
that Federal Government failure, not rush to pass more duplicative 
laws. In fact, that would be the responsibility of the Oversight 
Committee, which I could argue has not been doing proper oversight over 
the past couple of years.
  There may be other anecdotes about conflicts of interest, but let's 
be clear: No matter what we do, there will always be accusations of 
conflicts of interest.
  Republicans oppose conflicts of interest, but we also support 
responsible legislating. We also support holding those who are not 
following the current law or regulation accountable, rather than 
passing new laws.
  With this bill, the most likely outcome is unnecessary work and a 
more complicated Federal procurement process. It will burden businesses 
and shrink the pool of eligible contractors, not reduce conflicts of 
interest.
  Mr. Speaker, I urge opposition to this unnecessary, duplicative 
legislation, and I reserve the balance of my time.
  Mr. DeSAULNIER. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I will speak briefly on the work we have done on 
oversight on the opioid crisis, in this case specifically on the role 
that McKinsey & Company played in, unfortunately, the tragedy that has 
been the opioid epidemic that led us to introducing this bill for 
greater oversight.
  I will start by saying this is something that, for me, Chairwoman 
Maloney and some of my colleagues on both sides expressed a great deal 
of passion for.
  We had hearings on the opioid epidemic and the role of some of these 
agencies, including requiring the chairman of Johnson & Johnson to come 
to testify in front of the committee. The committee spent a good deal 
of time, and I know that there was concern across the aisle, given the 
devastation that this epidemic has caused.
  This particular initiative is directed at some of the things that 
were the most egregious part of what happened to the American public 
who suffered under the abuses of the opioid epidemic.
  In this case, McKinsey was a contractor for the FDA, Johnson & 
Johnson, and other people who were making money off of this well-told 
tragedy of how they were inducing people to be addicted to the drug 
that was supposed to be relieving their pain.
  The contractors play a critical role in supporting the Federal 
workforce and giving advice to government functions. These are 
contractors for which this initiative, this bill, would try to make 
sure the rules were clearer. It would help them, as well.
  Taxpayers need to know that work is done ethically and transparently. 
Unfortunately, loopholes allow contractors, which this initiative, this 
bill, attempts to close or will close, to advise private-sector clients 
and the Federal Government at the same time. I think anyone would agree 
that that is a conflict of interest.
  The most notorious example was what I just referred to, this conflict 
of interest playing out with McKinsey & Company's work on Perdue 
Pharma's roadmap, in this case, to ``turbocharge'' opioid sales. They 
were giving them advice on how to turbocharge an addictive drug that 
was causing devastation across this country.
  One of the things that led me into this discussion was, when I was in 
the legislature in California, two parents separately brought tragic 
cases of how their kids had lost their lives because of this.
  The conflict of interest fueled the opioid crisis that has claimed 
hundreds of thousands of American lives.
  I am grateful and proud of the work that I was able to do with a 
former chair, Elijah Cummings, who had great passion for this and 
opening the committee's investigation of Perdue Pharma specifically. I 
am grateful to current Chair Maloney for continuing this work.
  A vote to pass this bipartisan bill today will send it to the 
President's desk and will bring much-needed transparency to Federal 
contracting and help to address some of the things that led to the 
opioid crisis epidemic in this country.
  Mr. Speaker, I reserve the balance of my time.
  Mr. KELLER. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, despite addressing a valid concern, this legislation is 
simply unnecessary. Federal contractors are already supposed to provide 
impartial and objective assistance to Federal clients.
  The risks of conflicts of interest are addressed by the Federal 
Acquisition Regulation. I am confident the American taxpayer and our 
national interests are already protected in this area of Federal 
procurement policy.
  I know the gentleman mentioned opioids and a drug crisis. That is a 
concern for all Americans, but so is all the fentanyl that is killing 
Americans coming across our southern border.

  I would hope my colleagues would force the administration to close 
our southern border and make sure these illegal drugs aren't coming 
over and killing Americans.
  Mr. Speaker, I urge that we oppose this bill, which would burden 
companies, both large and small, that want to do business with the 
Federal Government, and I reserve the balance of my time.
  Mrs. CAROLYN B. MALONEY of New York. Mr. Speaker, I yield myself such 
time as I may consume.
  Mr. Speaker, I feel very strongly about this bill. It is one that 
came out of a research project that we had on contracting, where we 
found a major consulting firm was working for the FDA and the 
manufacturer at the same time. They didn't even have different people. 
It was the same people working for the FDA on regulation and for the 
manufacturer, which wanted easy regulations on the product they were 
putting out--in this case, opioids, which have killed more Americans 
than any other drug, probably, in history.
  I thank my colleagues in the Senate for introducing it and the staff 
of the

[[Page H9839]]

Oversight and Reform Committee for introducing it here in the House.
  It is absolutely outrageous. I think it should be a crime, actually, 
that a contractor would be allowed to advise government regulators and 
not tell them that, at the same time, they are advising the industry 
that is benefiting from weaker regulation.
  If we do not take steps to prevent conflicts of interest and thereby 
safeguard the integrity of government decisionmaking and operations, 
then we risk potentially serious breaches in the public trust.
  I think it is even more serious. You risk having unsafe drugs going 
into the marketplace, which has happened before.
  Most government contractors take this responsibility to disclose 
conflicts of interest seriously, but many do not. It is even the 
business model of some consulting firms to go after both the regulator 
and the manufacturer at the same time, and they have repeatedly done 
it.
  These contractors would benefit from uniformity in rules. Right now, 
they are patchwork. We need uniform rules. We need clear rules, and the 
clear rules should be that a consulting firm can only work for a 
regulator but cannot work for the manufacturer, or they can work for 
the manufacturer but not the regulator. Too often, they are working for 
the same positions with the same person, believe it or not.
  I think that this bill will save lives. It will make our industries 
fair and safer. It should be bipartisan, as it is in the Senate.
  Mr. Speaker, I urge my colleagues to strongly support the bill, and I 
reserve the balance of my time.

                              {time}  1915

  Mr. KELLER. Mr. Speaker, I yield myself the balance of my time to 
close.
  Mr. Speaker, I would just like to say that it should be--and already 
is--illegal for people who are providing this guidance and service to 
misrepresent things under the False Claims Act. So it is our 
understanding that it is already a crime to do that, and they would be 
held accountable.
  I know the gentlewoman said it should be a crime. It already is, and 
I don't know anywhere in the bill that it adds to that. So it should be 
a crime. People should not be doing things inappropriately. But as I 
mentioned, we already have the FAR that takes care of making sure 
people are doing the right things.
  Mr. Speaker, I urge my colleagues to vote against this unnecessary 
bill, and I yield back the balance of my time.
  Mrs. CAROLYN B. MALONEY of New York. Mr. Speaker, I yield myself the 
balance of my time to close.
  Mr. Speaker, I would say it is a very necessary bill because it is 
happening. If it is against the law, then the Department of Justice 
should come in and prosecute people. But they have not, and they are 
busy prosecuting a lot of other things.
  So it is life and death when it comes to healthcare.
  We know that the FDA originally wrote rules about the opioids saying 
they were not addictive. They wrote it right into the regulations: not 
addictive. They are one of the most addictive drugs of all times. They 
have caused hundreds of thousands of deaths, and we are spending 
billions of dollars in treatment trying to save the lives of people who 
have become addicted when the inscription used to be that it was safe. 
It was safe.
  So there are times when laws are abused. This is not about an 
individual drug company or an individual contractor or an individual 
consulting firm. It is about a uniformity of rules. We are looking at 
legislation. We want to stop that abuse.
  In a lot of our investigations the Department of Justice has come in 
and taken action. Maybe they should in this case, too. But if it is 
illegal, then it is not being enforced; and it is, I would say, 
dangerous if we don't make it clear--and ironclad clear--that you 
cannot work for the regulator and the manufacturer at the same time.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. Pursuant to House Resolution 1518, the 
previous question is ordered on the bill.
  The question is on the third reading of the bill.
  The bill was ordered to be read a third time, and was read the third 
time.
  The SPEAKER pro tempore. The question is on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. KELLER. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this question will be postponed.
  Proceedings will resume on questions previously postponed. Votes will 
be taken in the following order:
  Motion to concur with an amendment on H.R. 1437;
  Passage of S. 3905;
  Passage of S. 4003; and
  Motion to suspend the rules and pass S. 5230.
  The first electronic vote will be conducted as a 15-minute vote. 
Pursuant to clause 9 of rule XX, remaining electronic votes will be 
conducted as 5-minute votes.

                          ____________________