Consulting firms that serve the U.S. government are facing growing pressure to reduce or eliminate potential conflicts of interest arising from their simultaneous work with adversarial nations, with Senator Josh Hawley (R-Mo.) turning up the heat by introducing new legislation that would prohibit federal agencies from contracting with firms that hold contracts with the Chinese government, the Chinese Communist Party (CCP), or any of their subsidiaries, proxies, or affiliates.
The new proposed legislation, dubbed the “Time to Choose Act,” is soon to be introduced as a means of bringing additional scrutiny and accountability to consulting firms that benefit from federal contracts while serving entities in conflict with the U.S. Government.
“The fact that these consultants are awarded huge contracts by our Defense Department and other federal agencies, while they are simultaneously working to advance China’s efforts to coerce the United States is appalling and completely unacceptable,” Hawley said in a July 18 statement. “The bill would force these government contractors to choose whether to stand with the United States in its efforts to protect Americans against China’s imperial ambitions, or forfeit U.S. government contracts,” the statement said.
Senator Hawley’s statement singled out London-based firm McKinsey & Company, a global management consulting firm employing more than 27,000 people around the world. The firm currently holds nearly 1,400 contracts issued by the U.S. Government, valued in excess of $3.8 billion, and works closely with the U.S. military and intelligence communities.
McKinsey maintains that its U.S. federal arm is legally and operationally firewalled off from its entities that do business with China, and there are currently no known investigations of McKinsey contracts as a result of its work with Beijing or Chinese companies, many of which are state owned or controlled. The firm has faced additional scrutiny due to its ongoing consulting work with Russian state entities and private businesses, as many consultancies have legally separated from Russia-based partners or dropped Russian clients entirely as a response to the recent invasion of Ukraine. The consulting industry has been under heavy public pressure to divest from business in Russia and China, while both nations continue to take highly unpopular actions that raise extensive human rights concerns.