HR-6916-119
Received in the Senate and Read twice and referred to the Committee on Homeland Security and Governmental Affairs.
Sponsored by Keith Self (R-TX)
What it does
This bill would prohibit federal agencies from entering into, renewing, or extending contracts, grants, or other federal financial assistance with individuals convicted of specified federal fraud-related felonies (such as false claims, bribery, identity theft, mail/wire fraud, and money laundering) for three years after conviction. The prohibition also applies to entities where the convicted individual holds at least 25% ownership or exercises substantial control, with agency heads able to grant case-by-case waivers that must be reported to Congress, and requires the General Services Administration to update its exclusions list based on Justice Department notifications.
Who benefits
Taxpayers and federal agencies through reduced fraud risk in contracting and grant programs; law-abiding federal contractors and grant recipients who compete for the same funds without facing competition from recently convicted fraudsters; the General Services Administration's exclusion system, which gains a clearer statutory basis for listing convicted individuals.
Who is hurt
Individuals convicted of the listed federal felonies (and businesses they substantially own or control) who would lose eligibility for federal contracts, grants, or loans for three years, potentially affecting their livelihoods and any employees of small businesses they control; agencies may also bear administrative costs implementing waiver reviews and exclusion-list updates.
Supporters argue
Supporters argue that individuals convicted of fraud, bribery, false claims, or money laundering related to federal funds should not immediately remain eligible for the same federal money they abused, and that a mandatory three-year exclusion with a narrow waiver process closes a gap in existing suspension and debarment rules. They contend this protects taxpayer dollars and strengthens public trust in federal spending by creating a clear, statutory rule rather than relying solely on discretionary agency debarment decisions.
Opponents argue
Opponents argue that a blanket three-year exclusion, even with a waiver, could disproportionately harm small businesses and their innocent employees when an owner is convicted of an unrelated federal felony, and that existing suspension and debarment procedures already give agencies tools to address risk on a case-by-case basis. They contend the broad list of covered felonies and the 25% beneficial-ownership threshold could sweep in individuals with limited culpability or attenuated connections to the underlying fraud, creating harsh collateral consequences.
Constitutional context
Congress has broad authority under the Spending Clause (Art. I, §8, cl. 1) and the Necessary and Proper Clause to set conditions on federal contracts and financial assistance, and this bill operates as a straightforward eligibility restriction rather than a novel exercise of executive or judicial power; no landmark case directly governs a routine contractor-debarment statute of this kind.
Checks and balances
Congress sets the statutory exclusion rule and requires written notification to Congress of agency waivers, while executive agencies retain discretionary waiver authority and implementation responsibility, with courts available to review individual application disputes.
Historical precedent
This builds on existing federal suspension and debarment regulations (48 C.F.R. subpart 9.4 and 2 C.F.R. part 180) that already allow agencies to exclude convicted contractors, which this bill converts into a mandatory statutory rule for specified felonies.