On Friday May 26 USAID published a notice in the Federal Register seeking comments on implementation of its problematic Partner Vetting System for acquisition awards. Comments are due August 25th. The notice notes that the final rule for NGOs has been delayed and that USAID "has not yet made a final decision on whether to implement PVS."
The proposed process would require contractors to submit the USAID Partner Information Form (Form 500-13) on key individuals and officers of the organization's governing body. Requirements for subcontractor vetting are spelled out, although USAID may require vetting at any tier for supplies and services. Any changes in key individuals or principal officers would trigger a requirement that the form be submitted for that individual.
Many of the problems with the original proposal for PVS for nonprofit grantees of USAID are carried over into the proposal for contractors. For example, it requires detailed personal information to be submitted to USAID, but there is no explanation of how the agency will conduct the vetting or what standards will be used. In addition, the Background section says PVS is necessary "to help ensure that agency funds and other resources do not inadvertently benefit individuals or entities that are terrorists, supporters of terrorists or affiliated with terrorists." (emphasis added) However, the Definitions section of the proposed rule does not define what is meant by "supporters" or "affiliated with" terrorists.
The proposed rule does provide contractors with a limited right for reconsideration if they do not pass vetting. They must submit a written request to USAID within seven days with any explanation, documentation or other information that may address the problem. However, although the proposed rule says USAID must provide information about why a contractor does not pass vetting, this information may be limited for security reasons, making a preparing a reconsideration request difficult. USAID must make a decision on reconsideration applications within seven days of receipt, and its decision is final.
The notice also states that USAID will "perform a risk based assessment to determine the likelihood that the funds, goods, services, or other benefits to be provided" could end up benefitting terrorists or their supporters, "including people or organizations that who are not specifically designated by the U.S. Government but who may nevertheless be linked to terrorist activities." Key factors in the risk assessment would include:
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The nature of the items provided (cash, goods, etc.)
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Whether the contract is with an NGO, U.S. contractor, foreign entity
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Location of the activity
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"how easily funds could be diverted or misused"
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Urgency of the activity
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U.S. foreign policy considerations
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Other
For more information on the proposed PVS rule for nonprofit grantees see our
Issue Brief
