Bills to Prevent Conflicts of Interest in Acquisition Clear House Committee

The House Committee on Oversight and Reform favorably reported legislation that would instruct the Federal Acquisition Regulatory Council to craft new language agencies must use in guarding against conflicts of interest in the procurement process.

After voice votes during a business meeting Thursday, Chairwoman Carolyn Maloney, D-N.Y., moved the bills—H.R. 7602 and H.R. 8325, to prevent organizational and personal conflicts of interest, respectively—out of the committee amid partisan opposition. The meeting is in recess. Votes will be officially recorded when proceedings resume at a date to be determined, but a committee aide confirmed debate has concluded on the conflict of interest bills.  

The bills are Maloney’s response to an investigation the committee conducted into McKinsey and Company. Consultants and senior partners at the firm frequently worked on Food and Drug Administration contracts while also working for opioid manufacturers, including Purdue Pharma,” according to the initial findings of the investigation.  

“I feel strongly about this bill,” Maloney said, referring specifically to the legislation on personal conflicts of interest. “We had several hearings on it, where it was documented: abuses that led to the deaths of many, many Americans and [the] addiction of many Americans.” 

The legislation includes civil penalties for individuals and organizations found to be making false claims under the updated laws, including for the violation of “restrictions on a contractor’s employees disclosing, or using for personal gain, confidential information obtained in connection with performing the contract.”

That specific provision fills a hole Sen. Maggie Hassan, D-N.H. identified in corresponding legislation the Senate Homeland Security Committee passed in May. Hassan withdrew an amendment during the bill’s markup that would have instituted civil penalties to prevent companies that contract with the federal government from sharing information with their private sector clients, saying she understood the need to review feedback from the Office of Management and Budget.

During a hearing leading up to the Senate markup, Grant Schneider, former federal chief information security officer who is now senior director of cybersecurity services for the law firm Venable, told the committee that strong ethics rules sometimes stand in the way of filling vacancies in the federal acquisition workforce.

“I think we will be able to retain more people, if we can allow them more flexibility to move back and forth between industry and government,” he said.

House Republicans did not engage on the substance of the conflict of interest legislation Thursday. During their committee markup, Rep. Mike Cloud, R-Texas, said he supports preventing conflicts of interest across all agencies but that he wanted more time to review the legislation, which was introduced Monday.

But Rep. Clay Higgins, R-La., said Republicans are opposing the measures based on their broader philosophy regarding the role of government. 

“Free Americans following the law should be able to work wherever they want,” he said. “The federal government should stay the hell out of our way. The problem with laws like this is a continuous never ending growth of the federal government that consumes the people's treasure and treads upon the people's freedoms. We oppose it in principle.”

Responding to various concerns Republicans raised, Maloney told Nextgov, “Strengthening the existing rules on conflicts of interest does not add any cost to the American taxpayer, and the burdens on contractors to disclose and avoid conflicts are minimal.”  

“These bills will bring back transparency and ensure that contractors advising agencies on sensitive matters are serving the public interest, and not their own,” she said.

The committee also cleared, by voice vote, the Improving Digital Identity Act of 2021, despite Republican opposition. The legislation proposed by Rep. Bill Foster, D-Ill., calls on federal agencies to harmonize national digital identity infrastructure by leveraging biometric databases states have been building to participate in REAL ID, a standard the federal government has put in place for accepting state-issued identification. 

“Recent estimates place the cost of identity fraud in the U.S. at $52 billion in 2021, impacting 42 million consumers and threatening access to both public and private sector services,” the committee wrote promoting that measure in a background memo for the hearing.