Senators Call for GAO Risk Assessment of Contractors Working for China

A bipartisan team of Senators, citing significant conflicts of interest and national security risks, has called for a Government Accountability Office (GAO) probe into federal contracts awarded to private consulting firms that perform advisory work for both the U.S. government and the Chinese government or state-run businesses.

In a recent letter to the GAO, chairman of the Homeland Security and Governmental Affairs Committee Senator Gary Peters (D-MI) and Josh Hawley (R-MO) referenced information sharing within companies contracted by both the U.S. government and Chinese owned firms as well as the potential for severe risks to national security due to the possibility of Chinese entities accessing or taking advantage of firms’ access to U.S. government data. The letter cites consulting firms "building artificial islands to position missiles, fighters, and bombers in the South China Sea, and participating in exercises for an amphibious assault on Taiwan."

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The two lawmakers also asked the GAO to assess the risks posed by the Department of Defense, the Intelligence Community, and other federal agencies contracting with firms that simultaneously contract with the Chinese government or state-owned businesses, including "deliberate or inadvertent" sharing of U.S. government data. The letter requests the GAO identify contract clauses that could prevent national security or conflict of interest risks, and to ensure that agencies working for the federal government comply with such clauses.

The letter was sent at a time when consulting firms are facing intense scrutiny over their business activities, with lawmakers increasingly seeking to limit China’s involvement with U.S. contractors and technology services. As part of the fiscal 2023 omnibus bill, the popular China-based social media platform TikTok was banned from U.S. government devices, and state governments and even universities are beginning crackdowns of their own, concerned about the well-known data gathering capabilities of the app.

The move by Senators Peters and Hawley also comes on the heels of a bipartisan bill introduced by Peters titled the Preventing Organizational Conflicts of Interest in Federal Acquisition Act. The bill is focused on identifying and preventing potential conflicts of interest early in the federal government contracting process, requiring firms to disclose their business relationships with selected entities.