Preventing Organizational Conflicts of Interest in Federal Acquisition Act

Floor Speech

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Mr. DeSAULNIER. Mr. Speaker, pursuant to House Resolution 1518, I call up the bill (S. 3905) to prevent organizational conflicts of interest in Federal acquisition, and for other purposes, and ask for its immediate consideration.

The Clerk read the title of the bill.

Mr. Speaker, S. 3905, the Preventing Organizational Conflicts of Interest in Federal Acquisition Act, which was introduced by Senator Gary Peters, chairman of the Senate Homeland Security and Governmental Affairs Committee, has strong bipartisan support and passed the Senate this summer with unanimous consent.

In April, we introduced a companion bill, H.R. 7602, following one of the Oversight Committee's investigations, which highlighted the need to strengthen government contracting laws on conflicts of interest.

The committee's investigation found that a consulting contractor advised the Food and Drug Administration at the same time they were advising private-sector clients that were regulated by the FDA. Many times, it was the exact same consultants advising the FDA and private- sector clients on the same issue.

In this case, the consultant failed to follow the rules on disclosing these amazing conflicts, collecting millions of dollars from both the regulator and the private-sector client.

Although this is one extreme example, other organizational conflicts of interest, large and small, occur across government. The Government Accountability Office regularly fields bid protests involving organizational conflicts of interest.

In 2014, a major defense contractor paid a settlement for allegedly failing to disclose conflicts while advising the Nuclear Regulatory Commission.

Organizational conflicts of interest can occur when a contractor's competing interests raise questions about their ability to provide impartial advice to the government. It is crucial that government contractors are providing impartial advice, particularly when the government is paying for their expertise and objectivity on sensitive matters.

The rules on organizational conflicts of interest have not changed significantly since the 1990s. This bill would make long-overdue revisions to strengthen these rules.

The current rules set basic standards to prevent organizational conflicts of interest but leave the details up to individual agencies. The current patchwork system creates the risk of egregious breaches of the public trust.

In 2009, Congress asked for the organizational conflict of interest rules to be reassessed. Draft rules were issued, but the reform effort was eventually abandoned, and the rules were never finalized.

This bill requires the revisions that were then started to be completed. This bill would also mandate that rules on government contractor conflicts are thoroughly revised and ensure that there is a uniform set of standards.

These reforms will help government contractors as well by ensuring clarity and consistency across the executive branch. This is especially beneficial to contractors working for multiple agencies.

It is outrageous that a contractor would be allowed to advise government regulators at the same time they are advising the industry that is being regulated.

If we do not take steps to prevent conflicts of interest, and thereby safeguard the integrity of government decisionmaking and operations, then we risk potentially serious breaches in the public trust.

Mr. Speaker, I strongly support this bill, and I reserve the balance of my time.

Mr. Speaker, I will speak briefly on the work we have done on oversight on the opioid crisis, in this case specifically on the role that McKinsey & Company played in, unfortunately, the tragedy that has been the opioid epidemic that led us to introducing this bill for greater oversight.

I will start by saying this is something that, for me, Chairwoman Maloney and some of my colleagues on both sides expressed a great deal of passion for.

We had hearings on the opioid epidemic and the role of some of these agencies, including requiring the chairman of Johnson & Johnson to come to testify in front of the committee. The committee spent a good deal of time, and I know that there was concern across the aisle, given the devastation that this epidemic has caused.

This particular initiative is directed at some of the things that were the most egregious part of what happened to the American public who suffered under the abuses of the opioid epidemic.

In this case, McKinsey was a contractor for the FDA, Johnson & Johnson, and other people who were making money off of this well-told tragedy of how they were inducing people to be addicted to the drug that was supposed to be relieving their pain.

The contractors play a critical role in supporting the Federal workforce and giving advice to government functions. These are contractors for which this initiative, this bill, would try to make sure the rules were clearer. It would help them, as well.

Taxpayers need to know that work is done ethically and transparently. Unfortunately, loopholes allow contractors, which this initiative, this bill, attempts to close or will close, to advise private-sector clients and the Federal Government at the same time. I think anyone would agree that that is a conflict of interest.

The most notorious example was what I just referred to, this conflict of interest playing out with McKinsey & Company's work on Perdue Pharma's roadmap, in this case, to ``turbocharge'' opioid sales. They were giving them advice on how to turbocharge an addictive drug that was causing devastation across this country.

One of the things that led me into this discussion was, when I was in the legislature in California, two parents separately brought tragic cases of how their kids had lost their lives because of this.

The conflict of interest fueled the opioid crisis that has claimed hundreds of thousands of American lives.

I am grateful and proud of the work that I was able to do with a former chair, Elijah Cummings, who had great passion for this and opening the committee's investigation of Perdue Pharma specifically. I am grateful to current Chair Maloney for continuing this work.

A vote to pass this bipartisan bill today will send it to the President's desk and will bring much-needed transparency to Federal contracting and help to address some of the things that led to the opioid crisis epidemic in this country.

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