WASHINGTON
– Sen. Chuck Grassley (R-Iowa) co-authored bipartisan legislation along with
Sens. Gary Peters (D-Mich.), Maggie Hassan (D-N.H.) and Joni Ernst (R-Iowa) to
help identify and mitigate potential conflicts of interest between taxpayer-funded
projects and government contractors’ other business opportunities has advanced
in the Senate. The federal government contracts with private companies to
support important government functions – such as the delivery of services and
the approval of prescription drugs. However, many contractors also conduct
business with the private sector or other outside entities, and this can raise
questions about the reliability of consultations, advice or projects under
federal contracts. The legislation was approved by the Senate Homeland Security
and Governmental Affairs Committee.
“Federal
contractors are entrusted to provide critical goods and services to the federal
government as it serves the American people. If we don’t know whether they are serving
other, potentially conflicting interests, we can’t be confident that Americans
are getting exactly what they pay for. We’ve put together a good government
bill that takes steps to eliminate these potential conflicts of interest to
rebuild public trust in our contracting process,” Grassley said.
“When
private sector companies are working for the federal government – we need to
know whether other parts of their business might conflict with the tasks they
are performing for the American people. Unfortunately, federal contractors
often fail to disclose this information – calling into question whether outside
relationships could be influencing their taxpayer-funded work. This bipartisan,
commonsense legislation will ensure federal contractors are working in the best
interest of taxpayers without unnecessarily restricting their business
relationships, and that federal agencies have upfront knowledge about private
companies’ potential conflicts of interest before they are hired by the
government,” Peters said.
“Federal
contractors like McKinsey have acted against the best interest of our country,
communities, and citizens. Today, Congress took a step forward in advancing
legislation to help address this behavior. We saw how the substance misuse
crisis was fueled, in part, because bad actors like Purdue Pharma benefitted
from McKinsey’s willingness to engage in potential conflicts of interests
between government regulators and the businesses they regulate. This bipartisan
legislation will help ensure that federal contractors disclose any potential
conflicts of interests so that the government and the American people get a
fair shake,” Hassan said.
“Iowa
taxpayers expect and deserve transparency for how their hard-earned money is
being spent in Washington. This bipartisan measure shines light on how federal
funds are being spent and will help crack down on any conflicts of interest for
taxpayer-funded projects,” Ernst said.
Recent
reports have highlighted the need to prevent conflicts of interest within
companies that are awarded federal contracts. For example, McKinsey &
Company, a management consulting corporation often hired by the federal
government, was paid more than $140 million dollars since 2008 by the Federal
Drug Administration (FDA) to help support their oversight work of
pharmaceutical companies – including determining the safety and efficacy of
prescription pain medications. At the same time, McKinsey had not disclosed to
the FDA that they were also consulting for several opioid manufacturers on how
these companies could effectively market their products. This has called into
question whether consultants from McKinsey were providing biased advice to the
FDA, and whether that advice was influenced by their relationship with the drug
makers whose business practices are a root cause of the opioid epidemic. The
senators’ legislation will give federal agencies a process to evaluate similar
potential conflicts of interest to ensure that federal consultants and other
contractors are using taxpayer dollars to work in Americans’ best interests.
The
Preventing Organizational Conflicts of Interest in Federal Acquisition Act would
require agencies to identify potential conflicts for specific contracts early
in the process. Federal contractors would be required to disclose other
business relationships with entities that conflict with the specific work that
an agency has hired them to do. Private companies currently under contract with
the U.S. government would also have to disclose new potential business that
opposes ongoing services they are providing to the American people. The bill
would ensure federal contractors are aware of disclosure requirements and how
working with agencies could impact other parts of their business. Finally, the
legislation requires federal agencies to assess and update their procedures for
determining whether contractors could have a conflict of interest.
Below
are statements in support of the senators’ bipartisan legislation:
“The
U.S. government increasingly relies on government contractors for their
expertise on matters that threaten our nation's safety and security. Yet, based
on current federal contract regulations, agencies cannot always discern whether
government contractors have business relationships with foreign governments and
private entities that could create a conflict of interest. To protect the
integrity of services provided to the United States, CREW endorses the
Preventing Organizational Conflicts of Interest in Federal Acquisition Act,
which would require greater transparency in contractor business
relationships in order to prevent conflicts of interest,” Noah Bookbinder,
President of Citizens for Responsibility and Ethics in Washington said.
“Companies
perform mission-critical government functions. Organizational conflicts present
one type of ethics risk to the government, and they must be identified and
avoided through careful government oversight. Without more guidance,
organizational conflicts of interest can result in unfair competitive
advantages and biased contract awards—both of which compromise the impartiality
of the federal government and the integrity of the contracting process,” Scott
Amey, General Counsel for the Project on Government Oversight said.
“When
government policymaking is tainted by conflicts of interest, it weakens the
legitimacy and credibility of the entire process. That erodes public confidence
in government and harms democracy. This bill promotes greater transparency and
accountability to ensure the public can trust that government is making
decisions with their best interests at heart,” Scott Greytak, Director of
Advocacy for Transparency International U.S. said.