Time to Choose Act: Consulting Firms Must Cut Ties with China, Russia for Federal Contracts

The "Time to Choose Act of 2025" is on the table, aiming to change how the U.S. government hires consulting firms. At its core, this bill says that if a consulting company—those in the business of providing management, scientific, and technical advice (officially, North American Industry Classification System code 5416)—wants to land a contract with a federal agency, they'll first need to certify they aren't also working for certain foreign governments or related entities. The bill specifically calls out entities tied to China and Russia, as well as governments identified as state sponsors of terrorism and other organizations on various U.S. government watchlists (Sec. 5). The stated goal, according to Section 2 of the bill, is to eliminate conflicts of interest where a firm might be advising a foreign power in ways that could undermine U.S. security while simultaneously working for the U.S. government.

The Main Event: Pick a Side, Consultants

So, how does this work in practice? Before a consulting firm can sign a deal with a U.S. federal agency, Section 3 mandates they must formally state they don't have any active contracts with these "covered foreign entities." This isn't just a pinky promise; it's a required certification. Think about a large international consulting group that might have a lucrative contract advising the U.S. Department of Defense on supply chain logistics. If that same firm also has a contract helping a state-owned enterprise in China optimize its global operations, this bill would force them to choose. They can't do both if they want that U.S. government paycheck. This could mean some big decisions for firms with global client lists, potentially leading them to either drop certain foreign clients or step away from the U.S. federal market. The bill amends the Federal Acquisition Regulation (FAR)—the rulebook for government purchasing—to bake these new requirements into the contracting process.

The 'But What If...' Clause: Waivers for National Security (with Strings Attached)

Now, the bill does include an escape hatch, but it's meant for special circumstances. Under Section 3, the head of a federal agency can grant a waiver, allowing a firm to work for both the U.S. government and a covered foreign entity. This waiver can last up to 365 days, with a possible 180-day extension. But there are catches: the agency boss has to decide it's in the U.S. national security interest and that there's no other suitable contractor available. It's not a free pass. Before issuing a waiver, the agency must notify the Director of the Office of Management and Budget and key congressional committees. Plus, details about the waiver, including which foreign entities the contractor is working with, are supposed to be made public, unless doing so would itself harm national security. Firms operating under such a waiver also get an extra homework assignment: they must report any human rights violations, religious liberty violations, or risks to U.S. economic or national security they stumble upon during their contract work.

Lying Low? Not a Good Idea: The Price of Falsehoods

If a consulting firm tries to pull a fast one and knowingly provides false information about its foreign dealings, Section 4 lays out some serious consequences. The agency head is required to terminate the contract. Beyond that, the firm could be suspended or debarred from getting any future federal contracts, which is a big deal under FAR Subpart 9.4 (the rules for kicking misbehaving contractors out of the system). And if that's not enough, firms caught knowingly hiding or misrepresenting their foreign contracts could also face penalties under the False Claims Act (sections 3729 through 3733 of title 31, United States Code). This could mean being liable for up to three times the damages the U.S. Government sustains, plus other fines. So, honesty is definitely the best, and least expensive, policy here.

The Devil's in the Definitions: What's 'Consulting' and Who's 'Out'?

It's also important to look at what the bill defines as "consulting services." According to Section 5, it refers to advisory or assistance services similar to those defined in FAR 2.101. However, there's a list of what isn't covered: services for legal advice, audits, accounting, tax help, regulatory reporting, other legal compliance work, or participation in legal dispute resolution. This is a key detail because it means a firm could potentially still offer these excluded services to a "covered foreign entity" without violating this specific prohibition on federal contracting. Whether this is a practical distinction or a potential loophole is something to watch. The list of "covered foreign entities" is also extensive, encompassing various governmental bodies in China (including the Chinese Communist Party and the Peoples Liberation Army), the Russian Federation, entities sanctioned under Executive Order 13662, governments designated as state sponsors of terrorism (under laws like Section 1754(c)(1)(A) of the Export Control Reform Act of 2018), and entities on multiple lists maintained by the Departments of Commerce, Defense (like those under section 1237(b) of the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999), and Treasury (such as the Non-SDN Chinese Military-Industrial Complex Companies List under Executive Order 14032).

The Takeaway: Cleaner Contracts or Contracting Headaches?

The big idea behind the "Time to Choose Act of 2025" is to ensure consulting firms working for Uncle Sam are fully aligned with U.S. interests, especially when it comes to national and economic security. For consulting firms, it means a serious review of their client portfolios and potentially some tough business decisions. For federal agencies, it adds another layer of due diligence to the contracting process. While the waiver provision offers flexibility, its use and transparency will be critical. One final note from Section 6: the bill states that no additional funds will be allocated to implement these changes, meaning agencies will have to manage any new administrative burdens within their existing budgets.