Sen. Josh Hawley (R-Mo.) thinks it is “long past time” that the Department of Defense (DoD) and other federal agencies stop doing business with consulting firms such as McKinsey & Co. that also have contracts with elements of the Chinese regime.
“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.
“It is well past time that we hold these companies accountable and prohibit this kind of conflict of interest in government contracting.”
To that end, the Missouri Republican is introducing a legislative proposal—titled the “Time to Choose Act”—that would prohibit federal agencies from contracting with consulting firms that hold a contract with the Chinese regime, the Chinese Communist Party (CCP), or any of either’s subsidiaries, affiliates, or proxies.
“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.
The Hawley statement singled out the London-based McKinsey, which describes itself as a “global management consulting firm,” and noted that concerns have been raised in recent years about the 27,000-employee international corporate giant’s relationship with China.
Hawley pointed to a November 2021 NBC News report that found “McKinsey’s consulting contracts with the federal government give it an insider’s view of U.S. military planning, intelligence, and high-tech weapons programs.”
“But the firm also advises Chinese state-run enterprises that have supported Beijing’s naval buildup in the Pacific and played a key role in China’s efforts to extend its influence around the world,” NBC reported.
McKinsey, which also maintains a large office in the nation’s capital, currently has nearly 1,400 individual contracts issued by named U.S. government departments and agencies, with a total potential value in excess of $3.8 billion, according to data compiled by USASpending.gov, the federal website that tracks official outlays.
Hawley’s main concern is with firms that do business with the DoD and China, and McKinsey’s largest category of total potential value contracts with the federal government are from the Defense Department.
These include 112 contracts with a total potential value of more than $983 million, according to USASpending.gov.
But McKinsey has five times as many individual contracts with the General Services Administration through its Federal Acquisition Service, with 570 contracts worth a total potential value of $2.3 billion.
The company also has 68 contracts worth potentially more than $48 million with the Department of Housing and Urban Development.
Complicating the effort to clarify how much business the U.S. government is currently doing with McKinsey is that USASpending.gov also lists 298 contracts that have no federal agency identified as the issuer.
Many, if not all of these contracts, are thought to be with intelligence agencies. The potential total of these contracts could be as high as $18.5 billion, according to the government data source.
Two McKinsey spokesmen separately declined to comment for this story. Both also declined to say why they did respond to the November 2021 NBC report, saying: “We follow strict protocols, including staffing restrictions and internal firewalls, to avoid conflicts of interest and to protect client confidential information in all of our work.
“When serving the public sector, we go further: In addition to managing potential staffing conflicts, we are subject to our Government clients’ organizational conflict of interest requirements and comply with these obligations accordingly.”
There are currently no known U.S. investigations of McKinsey contracts with the federal government as a result of the firm’s work with Beijing or Chinese companies, which are typically effectively extensions of the regime.
McKinsey also has four contracts with the FBI with a total potential value of $8.6 million and six with the IRS, with a potential total value of $9.2 million.