Senate passes bill to root out conflicts of interest in federal contracting

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The Preventing Organizational Conflicts of Interest in Federal Acquisition Act sets new disclosure requirements and expands authorities for federal contracting officers. 

The Senate passed a bill on Tuesday that aims to root out conflicts of interest in federal contracting by including new disclosure requirements and updating how agencies determine whether contractors have potential conflicts of interest.

The Preventing Organizational Conflicts of Interest in Federal Acquisition Act would require federal contractors to disclose business relationships that oppose the services they provide to the American public or otherwise interfere with the work they have been hired to perform by federal agencies. It comes after the management consulting corporation McKinsey & Company drew nationwide legal challenges and criticism last year over its involvement in the U.S. opioid crisis while simultaneously working with the Food and Drug Administration, later paying a reported $600 million to settle charges.

The bill features proposed revisions to the Federal Acquisition Regulation that would include new contract clauses and solicitation provisions so contractors are less likely to develop conflicts of interest while working with the federal government. Contracting officers also would see expanded authorities under the bill to "take into consideration professional standards and procedures to prevent organizational conflicts of interest to which an offeror or contractor is subject."

Sen. Gary Peters (D-Mich.), chairman of the Senate Homeland Security and Governmental Affairs Committee and an original author of the bill, said in a statement announcing its passage: "Companies that receive taxpayer dollars from federal contracts should not turn around and advise clients to take actions that are against the interests of the American people."

"This bipartisan, commonsense legislation will require federal contractors to disclose any potential conflicts of interest before they are awarded a federal contract to ensure they are effectively serving taxpayers," he added.

Peters introduced the legislation earlier this year along with Sens. Chuck Grassley (R-Iowa), Maggie Hassan (D-N.H.), and Joni Ernst (R-Iowa).

Hassan said the McKinsey example exposed "the dangers that conflicts of interests in government contracting can pose to the American public" in a statement, adding: "This bipartisan bill will ensure that companies that work for the federal government are acting in the best interest of the American people – not Big Pharma."

Rep. Carolyn Maloney (D-N.Y.), chairwoman of the House Oversight Committee, also called out McKinsey for hiding from the FDA "the fact that they were playing both sides" in a statement after the Senate passage of the bill. Maloney, who introduced an accompanying bill in the House, added: "I vow to fight to get this critical legislation passed in the House and signed into law.”