| 1 | 1 | | II |
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| 2 | 2 | | 118THCONGRESS |
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| 3 | 3 | | 1 |
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| 4 | 4 | | STSESSION S. 2034 |
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| 5 | 5 | | To require the Secretary of Defense to develop procurement policy and guid- |
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| 6 | 6 | | ance to mitigate consulting company conflict of interests related to na- |
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| 7 | 7 | | tional security and foreign policy. |
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| 8 | 8 | | IN THE SENATE OF THE UNITED STATES |
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| 9 | 9 | | JUNE15, 2023 |
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| 10 | 10 | | Ms. E |
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| 11 | 11 | | RNST(for herself, Mr. KELLY, and Ms. HASSAN) introduced the fol- |
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| 12 | 12 | | lowing bill; which was read twice and referred to the Committee on |
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| 13 | 13 | | Homeland Security and Governmental Affairs |
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| 14 | 14 | | A BILL |
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| 15 | 15 | | To require the Secretary of Defense to develop procurement |
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| 16 | 16 | | policy and guidance to mitigate consulting company con- |
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| 17 | 17 | | flict of interests related to national security and foreign |
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| 18 | 18 | | policy. |
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| 19 | 19 | | Be it enacted by the Senate and House of Representa-1 |
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| 20 | 20 | | tives of the United States of America in Congress assembled, 2 |
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| 21 | 21 | | SECTION 1. SHORT TITLE. 3 |
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| 22 | 22 | | This Act may be cited as the ‘‘Combating Obstructive 4 |
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| 23 | 23 | | National Security Underreporting of Legitimate Threats 5 |
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| 24 | 24 | | Act of 2023’’ or the ‘‘CONSULT Act of 2023’’. 6 |
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| 26 | 26 | | kjohnson on DSK79L0C42PROD with BILLS 2 |
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| 27 | 27 | | •S 2034 IS |
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| 28 | 28 | | SEC. 2. ORGANIZATIONAL CONFLICT OF INTERESTS RELAT-1 |
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| 29 | 29 | | ING TO NATIONAL SECURITY AND FOREIGN 2 |
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| 30 | 30 | | POLICY. 3 |
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| 31 | 31 | | (a) F |
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| 32 | 32 | | INDINGS.—Congress makes the following find-4 |
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| 33 | 33 | | ings: 5 |
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| 34 | 34 | | (1) The reliance by the Department of Defense 6 |
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| 35 | 35 | | on consultants for mission support services can cre-7 |
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| 36 | 36 | | ate potential organizational conflicts of interest re-8 |
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| 37 | 37 | | lated to national security matters due to competing 9 |
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| 38 | 38 | | interests as a result of business relationships with 10 |
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| 39 | 39 | | foreign adversarial nations and entities. 11 |
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| 40 | 40 | | (2) It is imperative for consultants providing 12 |
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| 41 | 41 | | mission support services to the Department of De-13 |
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| 42 | 42 | | fense related to national security matters and for-14 |
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| 43 | 43 | | eign policy interests to not be providing mission sup-15 |
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| 44 | 44 | | port services to foreign adversaries regarding efforts 16 |
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| 45 | 45 | | counter to the national security and foreign policy 17 |
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| 46 | 46 | | interests of the United States. 18 |
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| 47 | 47 | | (3) Protecting against organizational conflicts 19 |
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| 48 | 48 | | of interest related to foreign adversarial nations and 20 |
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| 49 | 49 | | entities providing Federal mission support services is 21 |
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| 50 | 50 | | essential to the national security and foreign policy 22 |
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| 51 | 51 | | interests of the United States. 23 |
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| 52 | 52 | | (b) P |
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| 53 | 53 | | ROHIBITIONRELATED TOCERTAINCONTRACTS 24 |
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| 54 | 54 | | ORGRANTS.— 25 |
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| 57 | 57 | | •S 2034 IS |
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| 58 | 58 | | (1) IN GENERAL.—The Secretary may not after 1 |
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| 59 | 59 | | the date of the enactment of this Act enter into, 2 |
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| 60 | 60 | | renew, or extend a contract with, or award a grant 3 |
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| 61 | 61 | | to, a covered consultancy. 4 |
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| 62 | 62 | | (2) D |
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| 63 | 63 | | ISCLOSURE.—Any individual or entity that 5 |
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| 64 | 64 | | submits an offer or bid for a contract to provide con-6 |
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| 65 | 65 | | sulting services to the Department of Defense shall 7 |
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| 66 | 66 | | disclose in such offer or bid any information relevant 8 |
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| 67 | 67 | | to the individual or entity with respect to the prohi-9 |
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| 68 | 68 | | bition under paragraph (1), including— 10 |
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| 69 | 69 | | (A) whether the individual or entity has 11 |
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| 70 | 70 | | entered into a contract with, or received grants 12 |
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| 71 | 71 | | or other financial awards from, a covered entity 13 |
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| 72 | 72 | | in the five years prior to submitting the offer 14 |
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| 73 | 73 | | or bid; and 15 |
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| 74 | 74 | | (B) at the time the contract to provide 16 |
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| 75 | 75 | | consulting services to the Department will be 17 |
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| 76 | 76 | | entered into, whether— 18 |
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| 77 | 77 | | (i) any contract entered into by the 19 |
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| 78 | 78 | | individual or entity with a covered entity 20 |
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| 79 | 79 | | will still be in effect; and 21 |
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| 80 | 80 | | (ii) the individual or entity will be re-22 |
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| 81 | 81 | | ceiving funds from, or have any unobli-23 |
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| 82 | 82 | | gated or unexpended funds received under, 24 |
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| 84 | 84 | | kjohnson on DSK79L0C42PROD with BILLS 4 |
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| 85 | 85 | | •S 2034 IS |
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| 86 | 86 | | any grant or other financial award from a 1 |
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| 87 | 87 | | covered entity. 2 |
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| 88 | 88 | | (3) P |
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| 89 | 89 | | ENALTIES.— 3 |
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| 90 | 90 | | (A) I |
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| 91 | 91 | | N GENERAL.—If the Secretary deter-4 |
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| 92 | 92 | | mines that a contractor of the Department 5 |
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| 93 | 93 | | failed to make the disclosure required by para-6 |
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| 94 | 94 | | graph (2), the Secretary shall— 7 |
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| 95 | 95 | | (i) terminate the applicable contract 8 |
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| 96 | 96 | | for cause; and 9 |
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| 97 | 97 | | (ii) initiate a suspension and debar-10 |
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| 98 | 98 | | ment proceeding with respect to the con-11 |
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| 99 | 99 | | tractor. 12 |
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| 100 | 100 | | (B) M |
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| 101 | 101 | | AXIMUM LENGTH OF DEBARMENT .— 13 |
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| 102 | 102 | | The maximum length of a debarment of a con-14 |
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| 103 | 103 | | tractor under this paragraph shall be a period 15 |
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| 104 | 104 | | of 5 years. 16 |
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| 105 | 105 | | (c) C |
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| 106 | 106 | | ERTIFICATION.— 17 |
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| 107 | 107 | | (1) I |
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| 108 | 108 | | N GENERAL.—After a determination by the 18 |
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| 109 | 109 | | Secretary that a company is a covered consultancy, 19 |
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| 110 | 110 | | such company may submit to the Secretary a written 20 |
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| 111 | 111 | | and signed certification that— 21 |
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| 112 | 112 | | (A) the consultancy no longer is— 22 |
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| 113 | 113 | | (i) performing under a contract with a 23 |
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| 114 | 114 | | covered entity; 24 |
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| 117 | 117 | | •S 2034 IS |
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| 118 | 118 | | (ii) carrying out activities under a 1 |
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| 119 | 119 | | grant received from a covered entity; or 2 |
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| 120 | 120 | | (iii) receiving funds, or have any un-3 |
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| 121 | 121 | | obligated or unexpended funds received, 4 |
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| 122 | 122 | | from a covered entity; and 5 |
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| 123 | 123 | | (B) will not receive or pursue a contract 6 |
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| 124 | 124 | | with a covered entity or a grant or other finan-7 |
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| 125 | 125 | | cial award from a covered entity— 8 |
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| 126 | 126 | | (i) during the term of a contract with 9 |
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| 127 | 127 | | the Department of Defense; or 10 |
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| 128 | 128 | | (ii) while receiving funds from the De-11 |
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| 129 | 129 | | partment of Defense, or obligating or ex-12 |
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| 130 | 130 | | pending any such funds. 13 |
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| 131 | 131 | | (2) S |
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| 132 | 132 | | TATUS CHANGE.—Upon the approval by 14 |
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| 133 | 133 | | the Secretary of a certification submitted under 15 |
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| 134 | 134 | | paragraph (1), a company is deemed to not be a cov-16 |
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| 135 | 135 | | ered consultancy until the expiration of the certifi-17 |
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| 136 | 136 | | cation under paragraph (3). 18 |
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| 137 | 137 | | (3) E |
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| 138 | 138 | | XPIRATION.—A certification submitted by 19 |
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| 139 | 139 | | a company under paragraph (1) shall expire on the 20 |
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| 140 | 140 | | earlier of the date on which the company, after sub-21 |
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| 141 | 141 | | mitting such certification enters into, extends, re-22 |
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| 142 | 142 | | news, or performs under a contract with a covered 23 |
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| 143 | 143 | | entity for consulting services. 24 |
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| 146 | 146 | | •S 2034 IS |
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| 147 | 147 | | (d) GUIDANCE.—The Secretary shall issue procure-1 |
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| 148 | 148 | | ment policies for the Department of Defense as follows: 2 |
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| 149 | 149 | | (1) Policies to implement the prohibition under 3 |
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| 150 | 150 | | subsection (b)(1). 4 |
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| 151 | 151 | | (2) Best practices to avoid becoming covered 5 |
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| 152 | 152 | | consultancies under this section and for covered 6 |
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| 153 | 153 | | consultancies to end their status as such. 7 |
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| 154 | 154 | | (3) A policy articulating the exact provisions 8 |
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| 155 | 155 | | and terms relating to the requirements of para-9 |
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| 156 | 156 | | graphs (2) and (3) of subsection (b) to be included 10 |
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| 157 | 157 | | in solicitations, contracts, and grants of the Depart-11 |
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| 158 | 158 | | ment. 12 |
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| 159 | 159 | | (e) R |
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| 160 | 160 | | EVISION OFDEPARTMENT OFDEFENSEACQUI-13 |
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| 161 | 161 | | SITIONREGULATION.—Not later than one year after the 14 |
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| 162 | 162 | | date of the enactment of this Act, the Secretary shall re-15 |
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| 163 | 163 | | vise the Defense Federal Acquisition Regulation Supple-16 |
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| 164 | 164 | | ment to implement this section. 17 |
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| 165 | 165 | | (f) D |
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| 166 | 166 | | EFINITIONS.—In this section: 18 |
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| 167 | 167 | | (1) C |
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| 168 | 168 | | ONSULTING SERVICES .—The term ‘‘con-19 |
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| 169 | 169 | | sulting services’’ has the meaning given the term 20 |
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| 170 | 170 | | ‘‘advisory and assistance services’’ in section 2.101 21 |
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| 171 | 171 | | of the Federal Acquisition Regulation, except that— 22 |
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| 172 | 172 | | (A) the term does not include the services 23 |
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| 173 | 173 | | described in paragraph (3) of such section; and 24 |
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| 176 | 176 | | •S 2034 IS |
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| 177 | 177 | | (B) each instance of the term ‘‘Federal’’ is 1 |
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| 178 | 178 | | replaced with ‘‘client’’. 2 |
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| 179 | 179 | | (2) C |
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| 180 | 180 | | OVERED CONSULTANCY .—The term ‘‘cov-3 |
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| 181 | 181 | | ered consultancy’’ means a company that, itself or 4 |
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| 182 | 182 | | any subsidiary or affiliate thereof, in immediately 5 |
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| 183 | 183 | | preceding one year period entered into, extended, re-6 |
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| 184 | 184 | | newed, or performed under a contract with a covered 7 |
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| 185 | 185 | | entity for consulting services. 8 |
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| 186 | 186 | | (3) C |
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| 187 | 187 | | OVERED ENTITY.—The term ‘‘covered en-9 |
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| 188 | 188 | | tity’’ means any of the following: 10 |
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| 189 | 189 | | (A) The Government of the People’s Re-11 |
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| 190 | 190 | | public of China. 12 |
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| 191 | 191 | | (B) The Chinese Communist Party. 13 |
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| 192 | 192 | | (C) The People’s Liberation Army, the 14 |
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| 193 | 193 | | Ministry of State Security, or other security 15 |
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| 194 | 194 | | service or intelligence agency of the People’s 16 |
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| 195 | 195 | | Republic of China. 17 |
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| 196 | 196 | | (D) Any entity on the Non-SDN Chinese 18 |
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| 197 | 197 | | Military-Industrial Complex Companies List 19 |
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| 198 | 198 | | (NS–CMIC–List) maintained by the Office of 20 |
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| 199 | 199 | | Foreign Assets Control of the Department of 21 |
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| 200 | 200 | | the Treasury under Executive Order 14032 (86 22 |
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| 201 | 201 | | Fed. Reg. 30145; relating to addressing the 23 |
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| 202 | 202 | | threat from securities investments that finance 24 |
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| 205 | 205 | | •S 2034 IS |
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| 206 | 206 | | certain companies of the People’s Republic of 1 |
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| 207 | 207 | | China), or any successor order. 2 |
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| 208 | 208 | | (E) Any Chinese military company identi-3 |
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| 209 | 209 | | fied by the Secretary of Defense pursuant to 4 |
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| 210 | 210 | | section 1237(b) of the Strom Thurmond Na-5 |
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| 211 | 211 | | tional Defense Authorization Act for Fiscal 6 |
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| 212 | 212 | | Year 1999 (Public Law 105–261; 50 U.S.C. 7 |
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| 213 | 213 | | 1701 note). 8 |
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| 214 | 214 | | (F) Any Chinese State-owned entity or 9 |
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| 215 | 215 | | other entity under the ownership, or control, di-10 |
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| 216 | 216 | | rectly or indirectly, of the Government of the 11 |
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| 217 | 217 | | People’s Republic of China or the Chinese Com-12 |
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| 218 | 218 | | munist Party that is engaged in one or more 13 |
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| 219 | 219 | | national security industries. 14 |
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| 220 | 220 | | (G) The Government of the Russian Fed-15 |
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| 221 | 221 | | eration, any Russian State-owned entity, or any 16 |
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| 222 | 222 | | entity sanctioned by the Secretary of the Treas-17 |
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| 223 | 223 | | ury under Executive Order 13662 titled ‘‘Block-18 |
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| 224 | 224 | | ing Property of Additional Persons Contrib-19 |
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| 225 | 225 | | uting to the Situation in Ukraine’’(79 Fed. 20 |
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| 226 | 226 | | Reg. 16169). 21 |
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| 227 | 227 | | (H) The government or any State-owned 22 |
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| 228 | 228 | | entity of any country if the Secretary of State 23 |
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| 229 | 229 | | determines that such government has repeat-24 |
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| 232 | 232 | | •S 2034 IS |
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| 233 | 233 | | edly provided support for acts of international 1 |
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| 234 | 234 | | terrorism pursuant to— 2 |
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| 235 | 235 | | (i) section 1754(c)(1)(A) of the Ex-3 |
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| 236 | 236 | | port Control Reform Act of 2018 (50 4 |
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| 237 | 237 | | U.S.C. 4318(c)(1)(A)); 5 |
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| 238 | 238 | | (ii) section 620A of the Foreign As-6 |
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| 239 | 239 | | sistance Act of 1961 (22 U.S.C. 2371); 7 |
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| 240 | 240 | | (iii) section 40 of the Arms Export 8 |
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| 241 | 241 | | Control Act (22 U.S.C. 2780); or 9 |
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| 242 | 242 | | (iv) any other provision of law. 10 |
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| 243 | 243 | | (I) Any entity included on any of the fol-11 |
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| 244 | 244 | | lowing lists maintained by the Department of 12 |
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| 245 | 245 | | Commerce: 13 |
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| 246 | 246 | | (i) The Entity List set forth in Sup-14 |
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| 247 | 247 | | plement No. 4 to part 744 of the Export 15 |
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| 248 | 248 | | Administration Regulations. 16 |
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| 249 | 249 | | (ii) The Denied Persons List as de-17 |
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| 250 | 250 | | scribed in section 764.3(a)(2) of the Ex-18 |
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| 251 | 251 | | port Administration Regulations. 19 |
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| 252 | 252 | | (iii) The Unverified List set forth in 20 |
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| 253 | 253 | | Supplement No. 6 to part 744 of the Ex-21 |
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| 254 | 254 | | port Administration Regulations. 22 |
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| 255 | 255 | | (J) The Military End User List set forth 23 |
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| 256 | 256 | | in Supplement No. 7 to part 744 of the Export 24 |
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| 257 | 257 | | Administration Regulations. 25 |
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| 260 | 260 | | •S 2034 IS |
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| 261 | 261 | | (4) EXPORT ADMINISTRATION REGULATIONS .— 1 |
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| 262 | 262 | | The term ‘‘Export Administration Regulations’’ 2 |
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| 263 | 263 | | means the regulations set forth in subchapter C of 3 |
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| 264 | 264 | | chapter VII of title 15, Code of Federal Regulations. 4 |
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| 265 | 265 | | (5) N |
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| 266 | 266 | | ATIONAL SECURITY INDUSTRY .—The term 5 |
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| 267 | 267 | | ‘‘national security industry’’ means— 6 |
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| 268 | 268 | | (A) a military-related industry; 7 |
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| 269 | 269 | | (B) semiconductor production; 8 |
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| 270 | 270 | | (C) researching or commercializing quan-9 |
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| 271 | 271 | | tum computing; 10 |
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| 272 | 272 | | (D) producing products or services that 11 |
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| 273 | 273 | | use artificial intelligence; 12 |
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| 274 | 274 | | (E) the biotechnology industry; 13 |
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| 275 | 275 | | (F) the cybersecurity industry; or 14 |
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| 276 | 276 | | (G) the mining, processing, or refining of 15 |
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| 277 | 277 | | critical minerals (as such term is defined in sec-16 |
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| 278 | 278 | | tion 7002(a) of the Energy Act of 2020 (30 17 |
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| 279 | 279 | | U.S.C. 1606(a))) for use by a covered entity. 18 |
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| 280 | 280 | | (6) S |
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| 281 | 281 | | ECRETARY.—The term ‘‘Secretary’’ means 19 |
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| 282 | 282 | | the Secretary of Defense. 20 |
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| 283 | 283 | | Æ |
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