Senator Hassan’s Bipartisan Legislation to Prevent Conflicts of Interest in Federal Contracting Advances in Senate

WASHINGTON – Bipartisan legislation authored by U.S. Senators Maggie Hassan (D-NH), Chuck Grassley (R-IA), Gary Peters (D-MI), and Joni Ernst (R-IA) to help prevent potential conflicts of interest between taxpayer-funded projects and government contractors’ other business opportunities has advanced in the Senate. 

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. 

“Federal contractors like McKinsey have acted against the best interest of our country, communities, and citizens. Congress took a step forward in advancing legislation to help address this behavior,” said Senator Hassan. “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.”

In a recent NBC report detailing McKinsey’s relationship with both Russian state-owned enterprise Rostec and sensitive national security issues for the Department of Defense and U.S. intelligence community, Senator Hassan criticized McKinsey: “Whether it be the substance misuse crisis or work for state-owned enterprises in places like Russia and China, I am deeply concerned by McKinsey’s choices and by the fact that the U.S. government continues to contract with McKinsey despite those potential conflicts,” Senator Hassan said.

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. The bill would ensure that federal contractors are aware of disclosure requirements and how working with agencies could impact other parts of their business. Finally, the Committee adopted Senator Hassan’s amendment to the legislation that would require the federal government to update its rules to make it clear that individuals doing contract work for a federal agency should not simultaneously work for a business regulated by that agency.

Senator Hassan has led efforts dating back to last year to hold McKinsey responsible for potential conflicts of interest when contracting with the federal government and fueling the substance misuse crisis. During the Senator’s questioning at a Senate hearing last month, a top FDA official announced that the FDA has stopped issuing contracts to McKinsey pending ongoing investigations into potential conflicts of interest. Prior to that, the Senator led her colleagues in calling for a Health and Human Services Inspector General investigation on the FDA’s work with McKinsey and FDA’s contracting policies.

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