[Senate Report 117-219]
[From the U.S. Government Publishing Office]


                                                      Calendar No. 575
117th Congress      }                                   {       Report
                                 SENATE
 2d Session         }                                   {      117-219
_______________________________________________________________________

                                     



 COMBATING OBSTRUCTIVE NATIONAL SECURITY UNDERREPORTING OF LEGITIMATE 
                     THREATS (CONSULT) ACT OF 2022

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 4516

              TO REQUIRE THE OFFICE OF FEDERAL PROCUREMENT
              POLICY TO DEVELOP GOVERNMENTWIDE PROCUREMENT
             POLICY AND GUIDANCE TO MITIGATE ORGANIZATIONAL
               CONFLICT OF INTERESTS RELATING TO NATIONAL
          SECURITY AND FOREIGN POLICY, AND FOR OTHER PURPOSES






[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]





                December 5, 2022.--Ordered to be printed  
                             _________
                              
                 U.S. GOVERNMENT PUBLISHING OFFICE
                 
39-010                   WASHINGTON : 2022
                
                
                
                
                
                
                
                
                
                
                
                
        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   GARY C. PETERS, Michigan, Chairman
THOMAS R. CARPER, Delaware           ROB PORTMAN, Ohio
MAGGIE HASSAN, New Hampshire         RON JOHNSON, Wisconsin
KYRSTEN SINEMA, Arizona              RAND PAUL, Kentucky
JACKY ROSEN, Nevada                  JAMES LANKFORD, Oklahoma
ALEX PADILLA, California             MITT ROMNEY, Utah
JON OSSOFF, Georgia                  RICK SCOTT, Florida
                                     JOSH HAWLEY, Missouri

                   David M. Weinberg, Staff Director
                    Zachary I. Schram, Chief Counsel
                  Michelle M. Benecke, Senior Counsel
   Tiffany Ann Shujath, U.S. Department of Homeland Security Detailee
                Pamela Thiessen, Minority Staff Director
            Sam J. Mulopulos, Minority Deputy Staff Director
       Jeremy H. Hayes, Minority Senior Professional Staff Member
                     Laura W. Kilbride, Chief Clerk















                                                      Calendar No. 575
117th Congress      }                                   {       Report
                                 SENATE
 2d Session         }                                   {      117-219

======================================================================



 
 COMBATING OBSTRUCTIVE NATIONAL SECURITY UNDERREPORTING OF LEGITIMATE 
                     THREATS (CONSULT) ACT OF 2022

                                _______
                                

                December 5, 2022.--Ordered to be printed

                                _______
                                

 Mr. Peters, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 4516]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 4516) to require 
the Office of Federal Procurement Policy to develop 
governmentwide procurement policy and guidance to mitigate 
organizational conflict of interests relating to national 
security and foreign policy, and for other purposes, having 
considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                                CONTENTS

                                                                     Page
  I. Purpose and Summary..............................................  1
 II. Background and Need for the Legislation..........................  2
III. Legislative History..............................................  2
 IV. Section-by-Section Analysis of the Bill, as Reported.............  2
  V. Evaluation of Regulatory Impact..................................  3
 VI. Congressional Budget Office Cost Estimate........................  3
VII. Changes in Existing Law Made by the Bill, as Reported............  6

                         I. PURPOSE AND SUMMARY

    S. 4516, the Combating Obstructive National Security 
Underreporting of Legitimate Threats (CONSULT) Act of 2022, 
would require implementation of governmentwide procurement 
policy and guidance in the Federal Acquisition Regulation to 
help agencies address issues created when federal contractors 
have other business relationships with entities that may pose a 
national security risk, such as adversarial foreign entities or 
governments.

              II. BACKGROUND AND NEED FOR THE LEGISLATION

    The Combating Obstructive National Security Underreporting 
of Legitimate Threats (CONSULT) Act of 2022 directs the Office 
of Federal Procurement Policy, in coordination with relevant 
department heads such as the Secretary of Defense, Secretary of 
State, and Secretary of Commerce, to develop governmentwide 
policy and guidance to help agencies address organizational 
conflicts of interest (OCI) involving consultant contractor 
business relationships with entities that may pose a risk to 
national security or foreign policy interests. This policy and 
guidance are to be implemented in the Federal Acquisition 
Regulation, which currently does not address this specific type 
of OCI.\1\
---------------------------------------------------------------------------
    \1\See FAR Subpart 9.5 for existing policy and guidance on 
organizational and consultant conflicts of interest.
---------------------------------------------------------------------------
    Recent accounts have highlighted geopolitical issues 
involving federal procurement, and instances of contractors 
supporting the Department of Defense and other agencies on 
matters involving national security while also involved in 
other business relationships that could compromise, or appear 
to compromise, U.S. interests.\2\ Federal agencies need updated 
policy and guidance to avoid or mitigate these potential 
conflicts.
---------------------------------------------------------------------------
    \2\Brookings Institution, Russian and China nuclear arsenals: 
Posture, proliferation, and the future of arms control (Jun. 21, 2018) 
(https://www.brookings.edu/testimonies/russian-and-chinese-nuclear-
arsenals-posture-proliferation-and-the-future-of-arms-control/); NNSA 
Cancels $28B Site Management Deal To Split Work Up, Law360 (May 17, 
2022) (https://www.law360.com/articles/1494245/nnsa-cancels-28b-site-
management-deal-to-split-work-up). See also Advising both Chinese state 
companies and the Pentagon, McKinsey & Co. comes under scrutiny, NBC 
News (Nov. 13, 2021) (www.nbcnews.com/politics/national-security/
advising-both-chinese-state-companies-pentagon-mckinsey-co-comes-under-
n1283777); McKinsey & Co. worked with Russian weapons maker even as it 
advised Pentagon, NBC News (May 21, 2022) (www.nbcnews.com/politics/
national-security/consulting-firm-mckinsey-co-advised-state-owned-
russian-defense-firm-r-rcna29618).
---------------------------------------------------------------------------

                        III. LEGISLATIVE HISTORY

    Senator Joni Ernst (R-IA) introduced S. 4516, the Combating 
Obstructive National Security Underreporting of Legitimate 
Threats (CONSULT) Act of 2022, on July 13, 2022, with Chairman 
Gary Peters (D-MI) and Senator Margaret Hassan (D-NH). Senator 
Rick Scott (R-FL) joined as a cosponsor on July 20, 2022, and 
Senator Marco Rubio (R FL) joined as a cosponsor on September 
7, 2022.
    The bill was referred to the Committee on Homeland Security 
and Governmental Affairs.
    The Committee considered S. 4516 at a business meeting on 
August 3, 2022. The bill was ordered reported favorably by 
voice vote with Senators Peters, Hassan, Sinema, Rosen, 
Padilla, Ossoff, Romney, Scott, and Hawley present.

        IV. SECTION-BY-SECTION ANALYSIS OF THE BILL, AS REPORTED

Section 1. Short title

    This section provides that the Act may be cited as the 
``Combating Obstructive National Security Underreporting of 
Legitimate Threats (CONSULT) Act of 2022.''

Sec. 2. Findings

    This section identifies congressional findings related to 
the Act, including findings related to the federal government's 
reliance on contractors for mission support services creating 
the potential for conflicts of interest involving matters of 
national security, the importance of ensuring contractor 
support does not run counter to the national security and 
foreign policy interests of the United States, and the need to 
protect against this type of conflict as essential to the 
national security and economic security of the United States.

Sec. 3. Governmentwide procurement policy and guidance to mitigate 
        organizational conflicts of interest relating to national 
        security and foreign policy

    This section requires the Office of Federal Procurement 
Policy, in consultation with relevant agencies, to develop 
governmentwide procurement policy and guidance to address 
organizational conflicts of interest relating to contracts 
involving national security matters or foreign policy interests 
of the United States. This policy and guidance must include a 
definition of consulting contract; provisions and clauses for 
agencies to use that require consulting contractors to disclose 
potential organizational conflicts of interest involving 
certain entities; provide that organizational conflicts of 
interest found to be contrary to the national security or 
foreign policy interests of the United States may be grounds 
for denial of a contract; and, make clear that failure to 
disclose such a potential conflict may be grounds for 
termination for cause, suspension, or debarment of a 
contractor. This policy and guidance must be implemented in the 
Federal Acquisition Regulation within 1 year of enactment.

                   V. EVALUATION OF REGULATORY IMPACT

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill and determined 
that the bill will have no regulatory impact within the meaning 
of the rules. The Committee agrees with the Congressional 
Budget Office's (CBO) statement that the bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would impose no costs 
on state, local, or tribal governments.

             VI. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, November 9, 2022.
Hon. Gary C. Peters,
Chairman, Committee on Homeland Security and Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed table summarizing estimated budgetary 
effects and mandates information for some of the legislation 
that has been ordered reported by the Senate Committee on 
Homeland Security an Governmental Affairs during the 117th 
Congress.
    If you wish further details, we will be pleased to provide 
them. The CBO staff contact for each estimate is listed on the 
enclosed table.
            Sincerely,
                                         Phillip L. Swagel,
                                                          Director.
    Enclosure.

           SUMMARY ESTIMATES OF LEGISLATION ORDERED REPORTED

    The Congressional Budget Act of 1974 requires the 
Congressional Budget Office, to the extent practicable, to 
prepare estimates of the budgetary effects of legislation 
ordered reported by Congressional authorizing committees. In 
order to provide the Congress with as much information as 
possible, the attached table summarizes information about the 
estimated direct spending and revenue effects of some of the 
legislation that has been ordered reported by the Senate 
Committee on Homeland Security and Governmental Affairs during 
the 117th Congress. The legislation listed in this table 
generally would have small effects, if any, on direct spending 
or revenues, CBO estimates. Where possible, the table also 
provides information about the legislation's estimated effects 
on spending subject to appropriation and on intergovernmental 
and private-sector mandates as defined in the Unfunded Mandates 
Reform Act.

                                                  ESTIMATED BUDGETARY EFFECTS AND MANDATES INFORMATION
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                       Increases
                                                               Direct                 Spending Subject   Pay-As-You-   On-Budget
   Bill        Title        Status      Last      Budget     Spending,    Revenues,          to              Go         Deficits    Mandates    Contact
  Number                               Action    Function    2023-2032    2023-2032    Appropriation,    Procedures    Beginning
                                                                                          2023-2027        Apply?       in 2033?
--------------------------------------------------------------------------------------------------------------------------------------------------------
S. 4516    Combating      Ordered     08/03/22  800         Between      Between      Not estimated     Yes           No           No          Matthew
            Obstructive    reported                          zero and     zero and                                                              Pickford
            National                                         $500,000     $500,000
            Security
            Underreporti
            ng of
            Legitimate
            Threats
            (CONSULT)
            Act of 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
S. 4516 would require the Office of Federal Procurement Policy to develop policy and guidance to mitigate conflicts of interest in federal contracts
  involving national security or foreign policy interests. Contracts with the Chinese and Russian governments or affiliated entities as well as state
  sponsors of terrorism, among others, would be subject to the new policies. CBO estimates that enacting S. 4516 would have an insignificant effect on
  direct spending and revenues over the 2023-2032 period. CBO has not estimated the discretionary costs of implementing the bill. The bill contains no
  intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.

       VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    This legislation would make no changes in existing law, 
within the meaning of clauses (a) and (b) of subparagraph 12 of 
rule XXVI of the Standing Rules of the Senate, because this 
legislation would not repeal or amend any provision of current 
law.

                                  [all]