USAID’s Partner Vetting System: Controversial but Necessary

Over the weekend, The New York Timespublished a story that I was quoted in about the United States Agency for International Development’s (USAID) Partner Vetting System (PVS)—a tool to vet key individuals at organizations that apply for USAID funds for overseas projects. Although the story was great at laying out concerns related to the PVS, I wanted to point out some background to explain the timeline and highlight why better vetting can result in safer use of taxpayer dollars.

Since 2001, government-wide policies have been created to impede U.S. contract and grant dollars from supporting terrorist groups, some of which required improvements to screening procedures. In 2007, USAID proposed a rule to ensure that funds were not provided to individuals or entities associated with terrorism. The PVS rule would improve notice requirements, applicant certifications, and mandates for government officials to check terrorist listings. It was clearly important that such a rule be implemented: an audit published soon after the proposed rule was circulated found that “USAID’s policies, procedures, and controls are not adequate to reasonably ensure against providing assistance to terrorists.”

But USAID took its time to consider the final rules: they were published in 2009 and again last month. While USAID was creating a vetting system, the Special Inspector General for Afghanistan Reconstruction (SIGAR) determined that USAID and the State Department need increased authority to terminate contracts when enemy affiliations are identified.

The problem is real. A USAID official testified last year that the agency has “kept $49.3 million from being awarded to those who did not meet our vetting requirements, as a result of [its] vetting process.” The final rule published on June 26, 2015, stated that “in Afghanistan, we have prevented approximately $100 million from being awarded to entities that did not meet USAID’s vetting requirements.”

USAID isn’t the only department having a problem with vetting contracts—DoD, too, was having issues. In fact, Congress passed a law in 2011 forbidding the Department of Defense from contracting with the enemy in the Central Command Theater of operations (Section 841). Yet, despite that legislation, such contracts still seemed to be getting through. In 2012, SIGAR fought with the Army Suspension and Debarment Office over 43 companies and individuals suspected of actively supporting terrorism in Afghanistan that were still receiving taxpayer money. In another case, SIGAR notified the Pentagon that a company was hired for a U.S.-funded reconstruction project in Afghanistan even though the company had been blacklisted for supporting the insurgency.

In such cases, as well as in all federal contracts, the Project On Government Oversight has always pushed for improved contractor and grantee responsibility determinations and urged the government to create tools for officials to use to avoid risky contractors. We have also supported efforts to increase the transparency and accountability of beneficial ownership information (information about who owns a company to ensure deals aren’t signed with companies owned by government officials or their relatives), and the revolving door at civilian agencies and DoD. Simply stated, we have supported many reforms to ensure that taxpayer dollars are not wasted or awarded in corrupt backroom deals.

Similarly, although USAID’s PVS rule has many critics, I think that everyone is in agreement that taxpayer dollars should not be funding terrorist groups. USAID might have to tweak the programs a bit to protect USAID applicant information, but in these times, it is important to find the right balance between civil liberties and national security interests, especially when taxpayer dollars may be going to terrorists.

Update:

In the FY 2015 NDAA, Congress passed a prohibition on contracting with the enemy (Sect. 841), which extended and replaced previous provisions from the FY 2012 NDAA and from the FY 2014 NDAA (Sect. 831). Additionally, DoD operates Afghanistan vetting activities through its Vendor Vetting Reachback Cell in Tampa, Florida, and it utilizes a central contractor registration system to help vet vendors. Shockingly, however, some of the Afghanistan vetting work was outsourced to a contractor (here is the request for proposal and the contract).