[Federal Register Volume 80, Number 123 (Friday, June 26, 2015)]
[Rules and Regulations]
[Pages 36693-36707]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-15017]
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Rules and Regulations
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Federal Register / Vol. 80, No. 123 / Friday, June 26, 2015 / Rules
and Regulations
[[Page 36693]]
AGENCY FOR INTERNATIONAL DEVELOPMENT
2 CFR Part 701
RIN 0412-AA71
Partner Vetting in USAID Assistance
AGENCY: United States Agency for International Development.
ACTION: Final rule.
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SUMMARY: The U.S. Agency for International Development (USAID) is
implementing a pilot for a Partner Vetting System (PVS) for USAID
assistance and acquisition awards. The purpose of the Partner Vetting
System is to help mitigate the risk that USAID funds and other
resources could inadvertently benefit individuals or entities that are
terrorists, supporters of terrorists or affiliated with terrorists,
while also minimizing the impact on USAID programs and its implementing
partners. This final rule sets out the requirements for the vetting of
Federal awards, requirements including award terms for PVS, and applies
PVS to a pilot program and any subsequent implementation of PVS that is
determined appropriate. It follows publication of a proposed rule and
takes into consideration the public comments received.
DATES: This final rule is effective July 27, 2015.
FOR FURTHER INFORMATION CONTACT: Michael Gushue, Telephone: 202-567-
4678, Email: [email protected].
SUPPLEMENTARY INFORMATION:
A. Background
In accordance with the Privacy Act of 1974, 5 U.S.C. 552a, USAID
established a new system of records (see 72 FR 39042), entitled the
``Partner Vetting System'' (PVS) to support the vetting of key
individuals of non-governmental organizations (NGOs) who apply for
USAID contracts, grants, cooperative agreements, or other funding and
of NGOs who apply for registrations with USAID as Private and Voluntary
Organizations. In January 2009, USAID published a final rule (74 FR 9)
to add PVS to its Privacy Act regulation, 22 CFR 215, and to exempt
portions of this system of records from any part of 5 U.S.C. 552a,
Records maintained on individuals, except subsections (b), (c)(1) and
(2), (e)(4)(A) through (F), (e)(6), (7), (9), (10), and (11) if the
records in the system are subject to the exemption found in 5 U.S.C.
552a(j). To the extent applicable, records in this system may be exempt
from subsections (c)(3), (d), (e)(1), (e)(4)(G), (H), (I), and (f) of 5
U.S.C. 552a if the records in the system are subject to the exemption
found in 5 U.S.C. 552a(k). Any other exempt records from other systems
of records that are recompiled into this system are also considered
exempt to the extent they are claimed as such in the original systems.
USAID's final rule exempting portions of the Partner Vetting System
(PVS) from provisions regarding the accounting of certain disclosures
(5 U.S.C. 552a(c)(3) and (4)); access to records (5 U.S.C. 552a(d));
agency requirements (2 U.S.C. 552a(e)(1), (2), and (3), (e)(4)(G), (H),
and (I), (e)(5) and (8)); agency rules(f), civil remedies(g), and
rights of guardians(h) of the Privacy Act of 1974 went into effect on
August 4, 2009. Subsequently, USAID published a proposed rule (74 FR
30494) to amend 48 CFR Chapter 7, which is USAID's procurement
regulation, in order to apply PVS to USAID acquisitions. The final rule
implementing PVS for USAID acquisitions was published on February 14,
2012 with an effective date of March 15, 2012. In order to apply PVS to
USAID assistance, USAID published a Notice of Proposed Rulemaking
(NPRM) in the Federal Register on August 29, 2013 (78 FR 168) with a
public comment period of 99 days, closing on December 6, 2013. During
the 99-day comment period, USAID received comments from 23 separate
respondents. Those comments and our responses are discussed below.
B. Legal Basis for Partner Vetting
The Foreign Assistance Act of 1961, as amended (the ``FAA''),
provides the President with broad discretion to set terms and
conditions in the area of foreign assistance. Specifically, numerous
sections of the FAA authorize the President to furnish foreign
assistance ``on such terms and conditions as he may determine''. See,
e.g., section 122 of the FAA, which provides that, ``[i]n order to
carry out the purposes of this chapter [i.e., development assistance],
the President is authorized to furnish assistance, on such terms and
conditions as he may determine, to countries and areas through programs
of grant and loan assistance, bilaterally or through regional,
multilateral, or private entities.'' Similarly, sections 103 through
106 of the FAA authorize the President to furnish assistance, on such
terms and conditions as he may determine, for agriculture, rural
development and nutrition; for population and health (including
assistance to combat HIV/AIDS); for education and human resources
development; and for energy, private voluntary organizations, and
selected development activities, respectively. The FAA also authorizes
the President to ``make loans, advances, and grants to, make and
perform agreements and contracts with, any individual, corporation, or
other body of persons, friendly government or government agency,
whether within or without the United States and international
organizations in furtherance of the purposes and within the limitations
of this Act.''
These authorities have been delegated from the President to the
Secretary of State and, pursuant to State Department Delegation of
Authority 293, from the Secretary of State to the Administrator of
USAID. Agency delegations of authority, in turn, delegate these
authorities from the Administrator to Assistant Administrators, office
directors, Mission Directors, and other Agency officials.
In providing foreign assistance, the Administrator must take into
account relevant legal restrictions. For example, the FAA requires that
all reasonable steps be taken to ensure that assistance is not provided
to or through individuals who have been or are illicit narcotics
traffickers. Pursuant to annual foreign operations appropriations acts,
assistance to foreign security forces requires vetting to ensure that
assistance is not provided to units where there is credible information
that the unit has
[[Page 36694]]
committed gross violations of human rights. Restrictions in the FAA
against supporting terrorism (Pub. L. 87-195, Sec 571-574) or providing
assistance to terrorist states (Pub. L. 87-195, Sec 620A, Sec 620G, and
Sec 620H) as well as restrictions in Title 18 of the United States Code
on the provision of support or resources to terrorists (18 U.S.C. 113B)
similarly support a decision by the Administrator of USAID to authorize
terrorist screening procedures.
In addition, the broad authority of the FAA permits the
Administrator of USAID to consider a range of foreign policy and
national security interests in determining how to provide foreign
assistance. The United States has a strong foreign policy and national
security interest in ensuring that U.S. assistance is not provided to
or through individuals or entities that are terrorists, supporters of
terrorists, or affiliated with terrorists. This interest arises both
because of our concern about the potential diversion of U.S. assistance
to other uses and also our interest in ensuring that these individuals
or entities do not garner the benefit of being the distributor of U.S.
assistance to needy recipients in foreign countries. The United States
is an advocate of strong anti-terrorism provisions and has urged other
nations to control the flow of funds and support to terrorists. There
could be significant negative foreign policy repercussions if it were
determined that the United States was funding individuals and entities
that are terrorists, supporters of terrorists, or affiliated with
terrorists.
Further, Homeland Security Presidential Directive/HSPD-6 states
that to protect against terrorism it is the policy of the United States
to (1) develop, integrate, and maintain thorough, accurate, and current
information about individuals known or appropriately suspected to be or
have been engaged in conduct constituting, in preparation for, in aid
of, or related to terrorism, and (2) use that information as
appropriate and to the full extent permitted by law to support Federal
screening processes. HSPD-6 also requires the heads of executive
departments and agencies to conduct screening using Terrorist
Information (as defined therein) at all appropriate opportunities. In
accordance with HSPD-11, USAID has identified NGO applications for
USAID funds as one of the opportunities for which screening could be
conducted. Accordingly, use by USAID of information contained in U.S.
Government databases, i.e., vetting, is entirely consistent with HSPD-
6.
Finally, legislative and Executive Order prohibitions against
furnishing financial or other support to terrorists or for terrorist
related purposes, or against engaging in transactions with individuals
or entities that engage in terrorist acts, provide justification not to
award assistance if USAID already has access to information showing
that the applicant for assistance has such connections to terrorism.
Some of these prohibitions can be found in Sections 2339A and 2339B of
Title 18 of the United States Code, Executive Order 12947, as amended
by Executive Order 13099, Executive Order 13224, and Title VIII of the
USA Patriot Act. Accordingly, USAID's authority to conduct vetting is
implied from these authorities.
Based upon all of the above, USAID has concluded that it has the
legal authority to implement the PVS.
C. Summary of the Final Rule
USAID is issuing a final rule to add 2 CFR part 701, with an
associated application provision and award term. The application
provision, Partner Vetting Pre-Award Requirements, defines the vetting
process and the applicant's responsibilities for submitting information
on individuals who will be vetted, prior to award. The award term,
Partner Vetting, sets forth the recipient's responsibilities for
vetting during the award period, and the partner vetting process that
takes place after award.
D. Discussion of Comments
USAID received comments and suggestions from 23 organizations on
its proposed rule, which would enable USAID to apply the Partner
Vetting System to USAID assistance.
The following responses address comments that were specific to the
proposed rule for Partner vetting in USAID Assistance:
Demonstrated Need for PVS and Adequacy of Procedures
Comment: There is no evidence that USAID funds are flowing to
terrorist organizations through USAID-funded programs. Moreover,
partners have already implemented due diligence procedures, and there
is no plausible evidence that current practices are inadequate. As an
alternative to PVS, USAID should consider creating a system for U.S.
organizations to obtain an exemption from PVS based on these
organizations demonstrating to USAID that their own due diligence
processes are sufficient to address potential diversion of aid.
Response: Some organizations submitted comments that USAID does not
need to implement a partner vetting system since there is no evidence
that (1) USAID funds are flowing to terrorist organizations through
USAID-funded programs; or that (2) due diligence procedures implemented
by USAID or its partners are inadequate to address the potential
diversion of aid.
USAID addressed similar comments in publishing its final rule
exempting portions of its system of records (Partner Vetting System, or
PVS) from one or more provisions of the Privacy Act. See 74 FR 9
(January 2, 2009). Consistent with Executive Order 13224, terrorist
sanctions regulations administered by the Office of Foreign Assets
Control (OFAC) within the U.S. Department of Treasury, the material
support criminal statutes found at 18 U.S.C. 2339A, 2339B, and 2339C,
as well as other related Executive Orders, statutes and Executive
Branch policy directives, USAID has over the years taken a number of
steps, when implementing the U.S. foreign assistance program, to
minimize the risk that agency funds and other resources might
inadvertently benefit individuals or entities that are terrorists,
supporters of terrorists, or affiliated with terrorists. Specifically,
USAID requires inclusion of clauses in its solicitations, contracts,
grants, cooperative agreements and other comparable documents that
remind our contractor and grantee partners of U.S. Executive Orders and
U.S. law prohibiting transactions with, and the provision of support
and resources to, individuals or entities that are terrorists,
supporters of terrorists, or affiliated with terrorists. USAID also
requires anti- or counter-terrorist financing certifications from all
U.S. and non-U.S. non-governmental organizations seeking funding from
USAID under grants and cooperative agreements. USAID contracting and
agreement officers, prior to making awards of agency funds, check the
master list of specially designated nationals and blocked persons
maintained by OFAC. Implementing partners, as part of their due
diligence, can check these public lists. However, given the range of
activities carried out by USAID and the range of circumstances under
which they are implemented, additional procedures may be warranted to
ensure appropriate due diligence. In such instances, checking the names
and other personal identifying information of key individuals of
contractors and grantees, and sub-recipients, against information
contained in U.S. Government databases, i.e., vetting, is an
appropriate higher level safeguard that USAID can conduct and its
implementing partners cannot. In certain high risk countries,
[[Page 36695]]
such as Afghanistan, USAID has determined that vetting is warranted to
protect U.S. taxpayer dollars. In conducting due diligence, USAID's
implementing partners do not have access to these non-public databases
and therefore cannot avail themselves of the same universe of
information as USAID does in conducting vetting in Afghanistan, West
Bank/Gaza and elsewhere. In protecting U.S. taxpayer resources from
diversion, the importance in accessing information from non-public
databases for the purposes of vetting has been clearly demonstrated.
For instance, in Afghanistan, we have prevented approximately $100
million from being awarded to entities that did not meet USAID's
vetting requirements. As a result of USAID's vetting programs, 1.5-2.5
percent of potential awardees were deemed ineligible. While this
percentage may seem insignificant, USAID believes that such vetting
results have prevented the diversion of Agency funds from their
intended development purpose. USAID is implementing the PVS pilot
program in an effort to evaluate vetting in countries selected to
represent a range of terrorist threat risks, geographic diversity, and
locations where both Agencies have comparable programs. The PVS pilot
program is mandated by section 7034(i) of the Department of State,
Foreign Operations, and Related Programs Appropriations Act, 2012
(Division I, Pub. L. 112-74) and related acts.
Vetting seeks to close the gap between publicly available
information and information that can only be obtained from U.S.
Government databases. The Office of Foreign Assets Control (OFAC) list
of Specially Designated Nationals (SDN) is publicly available and
includes both individuals and companies owned or controlled by, or
acting for or on behalf of, targeted countries and individuals, groups,
and entities, such as terrorists and narcotics traffickers designated
under programs that are not country-specific. The collective list
promotes OFAC's enforcement efforts, and as a result, SDN assets are
blocked, and U.S. persons are generally prohibited from dealing with
them. While the SDN list serves as a useful resource, it is not fully
inclusive of terrorist information included in U.S. Government
databases. Through access to U.S. Government databases, USAID's vetting
team can view and analyze terrorist information that is not publicly
available for national security reasons but is accessible to USAID in
accordance with HSPD-6 and HSPD-11. To date, all ineligible
determinations from USAID's vetting process have been derived from
information obtained from U.S. Government databases and not from OFAC's
SDN list. Accordingly, USAID supports continued use of such databases
to mitigate the risk of U.S. taxpayer funds flowing to individuals or
entities that are terrorists, supporters of terrorists, or affiliated
with terrorists.
As an additional safeguard against the potential diversion of aid,
the vetting conducted under PVS complements the stringent due diligence
procedures undertaken by USAID and its implementing partners. Beyond
examining business sources, U.S. government records, and other publicly
available information to ensure proper use of appropriated funds in the
contracting and grant making process, USAID requires supplemental
information from organizations applying for these awards. While our
implementing partners are required to be diligent in their efforts to
screen their employees and employees of their subrecipients, they do
not have access to all information relevant to U.S. national security
interests. Rather than duplicating current due diligence efforts, PVS
complements these efforts, providing another method to help ensure that
USAID funds and other resources do not inadvertently benefit
individuals or entities that are terrorists, supporters of terrorists
or affiliated with terrorists, while also minimizing the impact on
USAID programs and its implementing partners.
Risk to Partners
Comment: NGOs will be perceived as intelligence arms of the U.S.
government, versus independent and neutral actors, increasing the
security risk for implementing partner employees and local partners.
Moreover, PVS will discourage international and local partners from
working with U.S. NGOs and will deter U.S. citizens and foreign
nationals from working for U.S.-funded programs. As evidenced under
existing vetting programs, lower-tier partners and vendors may be
unwilling or unable to provide their personal information . . .
artificially limiting the pool of eligible partners and vendors. In
addition, the burden will disproportionately affect smaller, nascent
local organizations that lack the capacity to understand and comply
with vetting requirements (contrary to USAID Forward).
Response: Organizations commented on the potential security risk to
implementing partners and local partners that will be required to
collect and submit personally identifiable information (PII) to USAID,
since they might be perceived to be agents for U.S. law enforcement or
intelligence. Moreover, commenters suggested that PVS could
artificially limit the pool of eligible partners and contractors since
they may opt not to be included in an application for an award in which
the submission of PII is required for vetting purposes.
USAID understands the concern expressed by organizations that
collecting PII suggests a linkage with U.S. intelligence gathering. The
concern has been raised before, including in connection with USAID's
vetting program in West Bank/Gaza. PVS is not a U.S. intelligence
collection program. Moreover, USAID is not a Title 50 Agency and is not
authorized by law to collect intelligence information. USAID complies
with all laws and regulations regarding information collection
(including Paperwork Reduction Act, OMB/OIRA approved collection, which
was authorized following a comment and response period), usage, and
storage. Consistent with guidance from our General Counsel, we have
established procedures for the use of PII for vetting purposes under
the PVS pilot program. The primary intent of the program is to
safeguard U.S. taxpayer funds. USAID collects the least amount of
information possible, while remaining cognizant of the need to
eliminate false positives. There is no other way that USAID can perform
this screening unless this information is collected. PII on key
individuals of organizations applying for USAID funds, either as a
prime awardee or as a sub-awardee, is entered into a secure USAID
database that is housed within USAID servers. Access to this data is
strictly controlled and provided only to authorized U.S. Government
staff with vetting responsibilities. Authorized U.S. Government
personnel who have been assigned roles in the vetting process are
provided role-specific training to ensure that they are knowledgeable
in how to protect personally identifiable information. Access to this
data is further restricted through role-based limitations.
Using data provided by the applicant, USAID analysts search for any
possible matches between the applicant organization or key individuals
associated with that organization and one or more names contained in
U.S. Government databases. Where a possible match is found, USAID staff
will thoroughly analyze all available and relevant data to determine
the likelihood of the match and make a recommendation regarding the
eligibility of the organization to receive USAID funding. In those
instances
[[Page 36696]]
where there is a positive match, USAID will update the existing public
or non-public database records for those organizations or individuals
with any pertinent data provided by the organization or individual.
USAID only updates the record once we have determined a match and there
is more accurate information on the individual that was voluntarily
provided on the Partner Information Form. Failure to provide these
updates would be counterproductive to the U.S. Government's
comprehensive counterterrorism efforts and inconsistent with a whole of
government approach.
Given the standard assumption that an exchange of personal
information is required as a part of government employment and
government funding opportunities, the provision of personally
identifying information for that purpose is not extraordinary, and its
collection does not imply an improper use. USAID has a responsibility
to take necessary actions to effectively safeguard U.S. taxpayer funds
from misuse, as well as to deprive terrorist organizations and their
supporters of money that might be diverted to fund their operations.
USAID's experience has been that organizations advancing humanitarian
and foreign assistance operations adapt to such requirements. Due
diligence to prevent diversion to those with terrorism connections has
increased substantially in the wake of the terrorist attacks of
September 11, 2001, without jeopardizing the effectiveness of foreign
assistance objectives, and we believe that the requirements of PVS will
not preclude our implementing partners' ability to find subcontractors
and/or employees abroad. USAID's experience with vetting in
Afghanistan, West Bank/Gaza and elsewhere demonstrates that assistance
programs can operate effectively while implementing vetting programs.
USAID will continue to consider these issues when evaluating the
effectiveness of the PVS pilot program.
Program Execution Delays
Comment: The time associated with processing and clearing vetting
applications will result in significant delays in program execution. In
addition, because it is difficult to know who all contractors for a
project will be during the application stage, large amounts of post-
award vetting would need to be conducted, causing significant
implementation delays.
Response: Commenters expressed concern regarding delays in program
execution attributable to the vetting process. USAID recognizes that
any additional requirement--whether related to PVS or otherwise--will
affect the delivery of assistance. USAID's goal is to achieve the
purpose behind any new requirement in the most efficient manner that
will minimize any potential negative impact on implementation of
activities.
Based on USAID's experience with vetting in West Bank/Gaza and
Afghanistan, the additional time needed for PVS will vary depending on
the individual circumstances of each award. It should be noted that
USAID is increasing its vetting staff to accommodate the additional
vetting required by the pilot program. Additional time, if any, may be
required to verify proper completion of the forms by implementing
partners. Should an adverse finding occur, the award decision will be
paused while officials consider the nature of the findings and other
relevant factors. USAID designed the PVS application and process to
allow for the flexibility to balance the need to make a timely award
with the need to respond appropriately to adverse findings.
Transparency
Comment: USAID should provide applicants with a clear explanation
about the purpose of PVS. Regulations should state that USAID will
provide a clear explanation in writing to applicants in the local
languages of the pilot countries about (1) the purpose of PVS; (2) the
type of information that will be collected from key individuals in the
PIF; (3) how data on key individuals will be used and shared among
different actors in the USG; and (4) how long such information will be
stored. USAID should provide notice of clear restrictions on the use
and sharing of personal data. Several organizations note language in
Senate Report 113-81 that is incorporated by reference in the Joint
Explanatory Statement of the Conference accompanying P.L. 113-76, the
Department of State, Foreign Operations, and Related Programs
Appropriations Act for FY 2014:
``All individuals and organizations being vetted should be
provided with full disclosure of how information will be stored and
used by the U.S. Government, including how information regarding a
`positive match' will be handled and how to appeal such a match.''
Response: Some organizations noted that USAID should include an
explanation about the purpose of PVS in writing to organizations
applying for awards, as well as the type of information collected and
how that information would be used and stored. As noted in the summary
to the proposed rule, the purpose of PVS is to help ensure that USAID
funds and other resources do not inadvertently benefit individuals or
entities that are terrorists, supporters of terrorists, or affiliated
with terrorists, while also minimizing the impact on USAID programs and
its implementing partners.
Prior Federal Register notices regarding USAID's PVS and the
proposed rule detail the type of information that will be collected in
the Partner Information Form and the use of such information. Our
response to a previous question details how the PII that is collected
is used in the vetting process. An applicant's PII will not be used to
create a ``blacklist'' of organizations and/or individuals who will be
barred from seeking U.S. government contracts and grants. Using the
information for that purpose would constitute a de facto suspension or
debarment, which is contrary to law. Organizations and key individuals
are vetted based on a specific contract or grant to be considered for
an award. Findings based on vetting results do not preclude an
organization's eligibility to bid on subsequent solicitations.
Agency Authority To Approve Individual Subawards
Comment: We recommend that USAID remove proposed changes in
226.92(g) as 226.25(c)(8) does not give USAID authority to approve
individual subawards. [226.92(g) reads as follows: ``When the prime
recipient is subject to vetting, vetting may be required for key
individuals of subawards under the prime award when prior approval in
accordance with 22 CFR 226.25(c)(8) for the subaward, transfer or
contracting out of any work.'']
Comment: USAID should ensure vetting requirements are not tied to
administrative approval requirements. The clause at 226.92(g) is
incomplete and links the need for vetting to an administrative approval
requirement, 226.25(c)(8), * * * which relates not only to subawarding
but also to the transfer or contracting out of work. We recommend
striking the references to 226.25(c)(8) as follows: ``When the prime
recipient is subject to vetting, vetting may be required for key
individuals of subawards under the prime award. Alternate I. When
subrecipients will be subject to vetting, add the following paragraphs
to the basic award term: (h) When subawards are subject to vetting, the
prospective subrecipient must submit a USAID PIF . . .''
Response: Several organizations recommended that USAID remove
[[Page 36697]]
references to prior approval required by 2 CFR 200.308(c)(6) and
previously found at 22 CFR part 226.25(c)(8). 2 CFR 200.308(c)(6)
states that ``For non-construction Federal awards, recipients must
request prior approvals from Federal awarding agencies for one or more
of the following program or budget-related reasons . . . Unless
described in the application and funded in the approved Federal awards,
the subawarding, transferring or contracting out of any work under a
Federal award.'' The purpose of the requirement is to ensure that, when
vetting is required, subrecipients proposed by the recipient after
award are properly vetted. Although the need for vetting is triggered
by the introduction of a new subrecipient to the award, administrative
approval requirements are separate from the vetting process. However,
as stated in the rule, when the vetting of subawards is required, the
agreement officer must not approve the subaward, transfer, or
contracting out of any work until vetting is complete and the
subrecipient has been determined eligible. When vetting of contractors
is required, the recipient may not procure the identified services
until vetting is complete and the contractor has been determined to be
eligible. In cases where the recipient is procuring services,
contractors of those services are subject to vetting when specified in
the award. There is, however, no administrative approval process for
recipient procurements.
It was also noted that the clause at 2 CFR 701.2(g) is incomplete.
USAID has revised the clause to state that USAID may vet subrecipients
when the prime is vetted and the prime requests approval of a new
subaward.
Delegation of Authority to Agreement Officers
Comment: Can delegation of the authority entrusted to AOs under
this rule be made to AORs?
Response: An organization inquired as to whether delegation of the
authority entrusted to Agreement Officers under this rule would also be
made to Agreement Officers' Representatives. Please note that the pre-
award vetting process itself proceeds separately from the selection
process for award to a successful applicant. For vetting requirements
prior to an award, the Agreement Officer's duties and responsibilities
cannot be delegated to an Agreement Officer's Representative or Award
Manager. As the USAID official responsible for all aspects of the
recipient selection process, only the Agreement Officer can perform the
tasks that assist the vetting process. These include determining the
appropriate stage of the award cycle to require applicants to submit
the completed USAID Partner Information Form (PIF), USAID Form 500-13,
to the vetting official identified in the assistance solicitation;
specifying in the assistance solicitation the stage at which the
applicants will be required to submit the USAID PIF; identifying the
services in the assistance solicitation and any resulting award where
the contractor will be subject to vetting; and making the award to an
applicant that vetting has determined eligible. As such, all vetting
procedures are the responsibility of the vetting official and are not
delegable as part of the Agreement Officer's authority.
For post-award vetting requirements, the vetting official is the
USAID employee designated to receive and communicate vetting
information from the recipient, subrecipients, and contractors subject
to vetting. The Agreement Officer cannot delegate these
responsibilities as they are not part of the Agreement Officer's
authority.
Application of Rule to Non-U.S. Organizations
Comment: The new rules apply to U.S. organizations and their
subrecipients but not to non-U.S. organizations as implementers of
prime awards. USAID should clarify whether the contents of the proposed
rule will apply equally to non-U.S. organizations as they do to U.S.
organizations. If the rule applies to non-U.S. organizations, how will
requirements be documented for non-U.S. recipients?
Response: USAID received a comment from an organization seeking
clarification as to whether the contents of this rule will apply
equally to non-U.S. organizations and U.S. organizations. Requirements
related to PVS rulemaking will apply to non-U.S. organizations just as
they apply to U.S. organizations. The rule has been revised to include
non-U.S. organizations.
Statutory Parameters of Pilot
Comment: Please confirm that the pilot will be limited to the five
countries listed. If so, please remove reference to ``other vetting
programs'' in the proposed rule. USAID should revise the proposed rule
by specifically articulating the geographic and time limitations of the
pilot program to comport with the relevant statutory requirements. [It
should also be noted that vetting activities not part of the pilot]
were not preceded by any formal rulemaking process allowing for public
comment.
Response: USAID was asked to confirm that the pilot will be limited
to five countries (Guatemala, Kenya, Lebanon, Philippines, and Ukraine)
and to articulate the geographic and time limitations of the pilot.
While the FY 2012 Appropriations Act mandates a PVS pilot program and a
report to Congress on the pilot program, it provides USAID and the
Department of State with flexibility to design the policies and
procedures for the pilot program, to select particular countries for
the pilot program, and to implement administrative rulemaking to govern
the vetting of acquisitions and assistance. The Department of State and
USAID agreed on five countries for the pilot program because they
represent a range of risks and are located where both agencies have
comparable programs. As explained in a previous response, USAID has the
legal authority to conduct vetting outside of the PVS pilot program
where a risk assessment indicates that vetting is an appropriate higher
level safeguard that is needed to protect U.S. taxpayer resources in
high-risk environments like Afghanistan.
Use of Existing Data Collection Tools
Comment: USAID should incorporate any vetting-related eligibility
constraints into existing public tools such as the U.S. System for
Award Management rather than creating a separate onerous process.
Response: It was suggested that USAID incorporate any vetting-
related eligibility constraints into existing tools such as the U.S.
System for Award Management (SAM). The Agency recognizes that partner
vetting places additional requirements on its partners. However,
incorporating vetting into SAM is not feasible. The partner vetting
process established in this rule applies only to USAID. SAM is the U.S.
Government-wide successor to the Central Contractor Registration (CCR)
and combines users' records from the CCR and eight separate Web sites
and databases that aided in the management of Federal procurement.
USAID cannot alter SAM and cannot impose vetting processes onto other
agencies. SAM collects data from suppliers, validates and stores this
data, and disseminates it to various government agencies. The purpose
of partner vetting for assistance is fundamentally different from and
incompatible with the purpose and function of SAM.
Partner Information Form (PIF)
Comment: One of the greatest burdens for applicants is the
mandatory requirement that applicants collect a Government-issued photo
ID number for
[[Page 36698]]
each vetted individual. The provision of a Government ID number should
not be mandatory.
Comment: Concern was expressed about the open-ended nature of
(d)(1)(iii) in Appendix B: ``Must provide additional information, and
resubmit the PIF with the additional information within the number of
days the VO specifies.'' The organization requested specific parameters
for the sort of information a VO can request and when that request can
be made.
Comment: There is no mention that data can be submitted via a
secure portal.
Comment: To reduce costs and burden for NGOs, USAID and DOS should
standardize data collection mechanisms and vetting procedures.
Comment: There is an inconsistency in the Federal Register
regarding the retention of PIF data. The announcement states that
information will be collected annually if the grant is a multi-year
award. However, it also states that USAID may vet key individuals using
information already submitted on the PIF.
Response: Organizations provided various recommendations to reduce
the burden for applicants to comply with requirements related to the
submission of data on the Partner Information Form (PIF).
One organization recommended that USAID not make it a mandatory
requirement that applicants collect a government-issued photo ID number
for each individual. In many cultures in locations where USAID provides
development assistance, the provision of name and date of birth
information only is insufficient for purposes of PVS. Some cultures
identify individuals using one-part names, descriptive names, or
titles. Additionally, the same individuals may have no recorded date of
birth. Consequently, USAID requires a certified form of identification.
Providing such unique identifiers better enables USAID to conduct the
vetting process efficiently and effectively. Generally, applicants may
be asked to provide telephone numbers or family information, or to
clarify personally identifiable information that may have been provided
erroneously. By requesting additional information, USAID aims to reduce
the number of false positives.
Another organization requested confirmation that data can be
submitted via the secure portal. Organizations applying for assistance
awards in countries covered under the PVS pilot may either submit data
via the Agency's PIF or the secure portal.
One general comment on the proposed rule was that USAID and the
Department of State should standardize data collection mechanisms and
vetting procedures. USAID and the Department of State are distinct
agencies with differing programs and operational models. USAID and the
Department of State have closely coordinated efforts on PVS and
conformed approaches as much as possible. For example, the Agencies use
similar information technology systems (PVS and RAM) to complete the
vetting process. However, USAID and State apply different vetting
procedures since USAID procurements are often executed at its overseas
missions, while State's procurement function is centralized in
Washington, DC As a result, in the PVS pilot program, USAID staff at
the pilot Missions coordinate with USAID staff in Washington, DC on the
vetting process, whereas State conducts vetting in Washington, DC. We
believe the added burden of using different partner information forms
represents a modest increase in burden on complying organizations and
is important to allow the pilot to achieve the same purpose for two
agencies with different procurement processes. We can also consider the
issue of different identification forms as part of our assessment of
the pilot should unanticipated challenges or burdens arise due to the
existence of separate forms.
Lastly, it was noted that there was conflicting information in the
rule regarding the retention of PIF data. When PIFs are received
containing personally identifiable information for a key individual
assigned to a pending award, the relevant data are added to the PVS
application. Applicants are vetted at that time using the information
provided. When awards are reviewed for successive year options,
partners are required to update information, and that information must
be vetted by USAID prior to the option year. The vetting official will
contact the awardee to confirm that the key individual information has
not changed. If there have been no changes to key individuals or their
identifiers, information for those initially vetted is available in PVS
and may be used for re-vetting.
The Risk-Based Approach
Comment: Who performs the risk-based assessment, and what would the
criteria be to vet? How will the data from each pilot country be
compared? Can USAID provide the full internal process on how an RBA
determination will be made, including who is involved and what recourse
mechanisms there are to the nature of the program, the type of entity
implementing the activity, the geographic location of the activity, the
safeguards available, and how easily funds could be diverted or
misused. Other considerations may include the urgency of the activity
and the foreign policy importance of the activity.
Response: Rather than introduce a monetary threshold, whereby prime
organizations and their partners applying for an award at or above the
threshold are subject to vetting regardless of the nature of the award,
operating environment, or program or activity to be implemented, as
suggested by some organizations, the PVS pilot program uses a risk-
based assessment.
Regarding the commenter inquiring about recourse mechanisms, an
applicant may only request reconsideration of an ineligibility
determination. The risk-based assessment does not focus on or capture
data on implementing partners or subprime organizations. Rather, the
assessment takes a holistic approach by evaluating a myriad of factors
contributing to the overall level of risk of a new program or activity,
including, but not limited to, the operating environment, nature of the
program or activity, geographic locations of the proposed program or
activity, and the amount of the award. Moreover, the risk-based
assessment is designed to be conducted during the pre-solicitation
phase, after the Statement of Work has been finalized, by USAID
personnel who are most familiar with the proposed award and program or
activity to be implemented. Given the nature and timing of the
assessment as it relates to the procurement process, providing a
recourse mechanism would not be appropriate.
Another concern raised in comments received was that the nature of
the RBA process, which is conducted by AORs, would lead to significant
pilot inconsistencies. While the AOR will primarily be designated to
conduct the RBA, USAID's Office of Security, Bureau for Management, and
other Agency stakeholders are responsible for ensuring that the data be
as accurate and complete as possible. Analysis of data collected from
each RBA will help USAID determine whether there is a correlation and
the nature of the correlation between vetting results and the level of
risk established in the RBA. Solicitations for assistance awards under
which vetting may occur will include language indicating that potential
applicants may be vetted (pending the outcome of the RBA). An important
aspect of the PVS pilot is testing the RBA model.
[[Page 36699]]
One organization inquired as to who would be responsible for
conducting the RBA when the grants program is managed by a contractor
and not directly by USAID. Grants programs managed by contractors are
properly part of vetting under acquisition rather than assistance. RBAs
that USAID conducts for a particular planned acquisition will include
consideration of Grants Under Contracts when these are part of the
planned activities.
Lastly, an organization requested that USAID specify the full range
of assistance agreements to be covered by the RBA. The applicable range
of federal assistance instruments is identified in the definition of
Federal award found at 22 Part 200.38.
Direct Vetting Approach
Comment: We recommend adopting a direct vetting approach, whereby
subrecipients and vendors would be required to interact directly and
solely with USAID for vetting purposes. The rule should make it more
explicit that (1) no organization will be required to gather or verify
information from a different organization or its key individuals; (2)
organizations must submit their information directly to the VO; and (3)
VO determinations must be communicated directly to the organization.
The role of prime grantees should be limited to notifying local
partners that they would need to submit their own information to the
USAID vetting official, and directing them to the appropriate portal or
Web site for information on such vetting. We urge USAID to state
explicitly that PVS will not require prime recipients to verify
information on the subrecipients or vendors, to convey vetting
determinations to subrecipients or vendors, or to act as an
intermediary in any way with respect to such vetting processes. The
rule should specify that subrecipients submitting their vetting data
directly to USAID have the responsibility to monitor and submit updated
PIF or vetting data to USAID.
Response: Some organizations requested that USAID adopt what is
termed a ``direct vetting approach,'' in which subprime organizations
would interact directly with USAID for vetting purposes. USAID will
offer a type of direct vetting approach as an option to implementing
partners for a select group of awards under the pilot program. Under
the direct vetting approach, a prime organization applying for an award
to be implemented in a pilot country would request potential sub-prime
awardees to submit information required for vetting to USAID directly
instead of sending such information to USAID via the prime. In this
approach, USAID would communicate directly with the potential sub-prime
awardee solely for the purposes of vetting, including the transmittal
of eligibility and ineligibility notices. However, the prime would
remain responsible for ensuring that the information provided by its
sub-prime organizations to USAID for the purposes of vetting is
accurate and complete to the best of its knowledge.
In evaluating the direct vetting approach, USAID will consider the
extent to which the approach was utilized and analyze its impact on
USAID and partner organizations.
Privacy/Data Protection Laws
Comment: Consistent with applicable privacy and data protections
laws of countries where NGOs, their subrecipients, or vendors operate,
USAID should provide significantly greater clarity on how the vetting
processes will allow NGOs and their subrecipients or vendors to comply
with those laws while implementing PVS. It is important to specify in
detail who will have access to the data and the extent to which the
data will be shared, how long the data will remain in any vetting
database or otherwise be kept by USAID or other agencies, whether any
individual could seek to have personal data removed from any vetting or
other intelligence database, and the safeguards around the storing,
sharing and use of such personal data. [CRS requested that the rule be
modified to include an exemption to its application when it can be
demonstrated that implementation will force an NGO to violate
applicable local law.]
Response: Commenters requested information regarding the storing,
sharing, and use of personal data and cited concerns about potential
conflict with applicable foreign privacy and data protection laws.
Prior Federal Register notices regarding USAID's PVS detail how
data is stored, shared, and used under PVS. See 72 FR 39042 (July 17,
2007) and 74 FR 9 (January 2, 2009). USAID will review data retention
policies as part of the PVS pilot.
Throughout the design process of PVS, USAID has been committed to
protecting national security while complying with all administrative
requirements, and protecting privacy and other rights of its partners
and their employees. USAID places a high priority on data protection
and has a strong information security program. USAID is required to
report annually on Federal Information Security Management Act
compliance. Additionally, USAID's information security program is
audited by the USAID Office of the Inspector General. USAID will
continue to evaluate issues relating to privacy and data protection
during implementation of the pilot and consider accommodations as
necessary.
The Vetting Process
Comment: Please confirm that only new awards (not existing awards)
will be vetted under the pilot. Under what circumstances does USAID
contemplate post-award vetting?
Comment: We request that you provide a specific timeframe in which
vetting officials have to make a vetting determination.
Comment: The flow-down applicability for vetting is unclear,
including for lower-tier awards. How far does vetting flow down? Which
types of subrecipients and vendors have to be vetted? What triggers
vetting of subrecipients and vendors? What about in-kind procurements
conducted by contractors for grants-under-contract?
Comment: The determination as to who should be vetted is highly
subjective and variable. The subjectivity of the determination that a
given award or environment requires vetting means that universal
guidance on preparing and implementing USAID-funded programs cannot be
developed.
Comment: There is no guidance in the regulation instructing AOs on
how to determine which parties should be vetted in any particular
circumstance or when to exempt activities and individuals from the
vetting process.
Comment: Nowhere in this proposed rule * * * does USAID explain the
relationship between key individuals and the organization and whether
the failure of any individual to pass the vetting process also acts as
a disqualification of the entire organization and its applications for
assistance.
Comment: There is significant concern about the accuracy of the TSC
lists (referenced DoJ's OIG audit documenting higher error rate and
dysfunction of central terrorist watchlist). How will USAID ensure that
an applicant does not fail vetting due to a false positive?
Response: USAID received a variety of comments related to the pilot
vetting process. One organization requested confirmation that only new
awards will be vetted under the pilot and sought further details on
circumstances that could lead to post-award vetting. Under the PVS
pilot, it is anticipated that vetting will be implemented for
assistance awards made after the effective date of this rule. In most
[[Page 36700]]
instances, we anticipate that post-award vetting may be required
whenever RBA parameters or a change in key individuals indicate that
vetting is necessary.
Comment: Another organization requested that vetting officials
provide a vetting determination within a specific timeframe.
Response: The vetting procedures utilized by USAID are in
accordance with HSPD-11. Analysts assess the credibility of information
obtained from U.S. government databases. USAID processes vetting
requests as quickly as possible and has taken steps to increase USAID
staff to expedite the processing of vetting requests. A hard and fast
deadline for processing vetting requests and making a final decision on
vetting requests cannot be provided due to the nature of the vetting
process. The vetting process includes analysis of information by USAID
analysts who make recommendations, and evaluation of those
recommendations by USAID mission staff, with the possibility that
USAID/Washington staff may be called upon to evaluate recommendations
from analysts and mission staff. That said, USAID is mindful of the
importance of timely processing and vetting decisions to the effective
implementation of foreign assistance and is working on a regular basis
to improve the vetting process by including efforts to make the process
as expeditious as possible without undercutting efforts to safeguard
U.S. taxpayer resources from diversion from their development purpose.
Regarding the impact of the vetting process on providing urgently
needed humanitarian assistance, under the PVS Pilot Program, USAID has
the authority not to require pre-award vetting, and does not intend to
require pre-award vetting, where vetting would hinder the delivery of
urgently needed humanitarian assistance. USAID reserves the right to
conduct post-award vetting in such situations. Factors such as the
number of key individuals, the accuracy and completeness of the
personally identifiable information provided, and the country or region
in which programs will be implemented may impact the amount of time it
will take from submission of the requisite information to the final
vetting determination. It is in the interest of both USAID and its
partners that the vetting process be conducted and the vetting
determination made as effectively and expeditiously as possible.
Organizations also commented that the rule is unclear about the
level and type of organizations subject to vetting. In general, vetting
will take place at the first and second tiers. However, certain
circumstances may dictate less vetting or more vetting. This policy
applies to subrecipients who benefit from U.S. dollars funding an award
without limits. A subrecipient must notify the primary award recipient
(Prime) when another award is to be made for any portion of the
government award. The Prime will then notify the USAID Agreement
Officer and arrange for the additional vetting.
Organizations also suggested that the Agency's determination as to
who should be vetted is subjective and variable. As referenced in a
previous response to public comment, USAID's decision on whether or not
to vet is based on objective criteria documented in the Risk-Based
Assessment, such as the amount of an award, location and nature of the
program or activity being implemented, and the national origin or
association of the organization. In addition, USAID's Office of
Security maintains and utilizes standard operating procedures when
vetting applicants for those Missions and Bureaus implementing PVS.
It was suggested during the comment period that USAID clarify in
the rule the relationship between an organization and its key
individuals as far as the vetting process is concerned. For example,
when a key individual is found ineligible through the vetting process,
is the organization applying for the award (the applicant) no longer
eligible for that award or future awards? The organization applying for
an award subject to vetting is responsible for selecting key
individuals and verifying that the Partner Information Form for each
key individual is accurate and completed before it is submitted to
USAID for vetting. As the responsible agent for its key individuals,
the organization is found ineligible if any key individual is found
ineligible. If USAID determines that the applicant is ineligible for
the award based on the ineligibility of one or more of its key
individuals, USAID notifies the applicant that it is ineligible for
that particular award but has the opportunity to submit a
reconsideration request to USAID. The applying organization may opt to
remove and/or replace a key individual and reapply for an award. In
this case, the applicant would be re-vetted based on the key
individuals identified in the renewed application. Regardless of the
outcome on this particular solicitation, the organization may continue
to apply for other USAID awards since each final vetting determination
decision is specific to a particular solicitation under PVS and does
not in and of itself constitute a basis for evaluating an application
for a different award.
Another organization inquired as to how the Agency will ensure that
an applicant will not fail vetting due to a false positive. As stated
in the Agency's publication of its final rule exempting portions of its
system of records (Partner Vetting System, or PVS) from one or more
provisions of the Privacy Act, decisions by USAID under PVS as to
whether or not to award funds to applicants will not be based on the
mere fact that there is a ``match'' between information provided by an
applicant and information contained in non-public databases and other
sources. See 74 FR 9 (January 2, 2009). Rather, in a timely manner,
USAID will determine whether any such match is valid or is a false
positive. The detailed identifying information required of applicants
under the PVS in and of itself significantly reduces the risk of
individuals being misidentified. Additionally, USAID's vetting team
will review and analyze the matching information to further minimize
false positives.
Perceived Vague or Broad Vetting Criteria
Comment: The vetting criteria are vague and overly broad, extending
to those ``affiliated'' with or with ``linkages'' to terrorists. These
terms are not defined and could be interpreted so broadly that a person
could fail vetting on the basis of activities they do not support or
control.
Commenters expressed some concern that vetting criteria were vague
or overly broad, particularly as they may be applied to those
``affiliated'' with or having ``linkages'' to terrorists.
Response: It is a top priority for USAID to mitigate the risk that
its funds and other resources could inadvertently benefit individuals
or entities that are terrorists, supporters of terrorists, or
affiliated with terrorists, while also minimizing the impact on USAID
programs and its implementing partners. USAID responded to similar
comments regarding potentially vague criteria when USAID published in
the Federal Register its Privacy Act final rule for PVS. See 74 FR 9
(January 2, 2009).
USAID conducts vetting in accordance with HSPD-6 and HSPD-11,
focusing on ``individuals known or appropriately suspected to be or
have been engaged in conduct constituting, in preparation for, in aid
of, or related to terrorism.'' Consequently, USAID defines individuals
or entities with ``affiliations'' or ``linkages'' to terrorism
[[Page 36701]]
as ``individuals known or appropriately suspected to be or have been
engaged in conduct constituting, in preparation for, in aid of, or
related to terrorism.''
USAID appreciates the concerns of its partners and, in order to
help address potential concerns regarding the application of vetting
criteria, is incorporating an administrative appeal process during
which applicants can request that the Agency reconsider an
ineligibility determination and submit any relevant documentation.
Timing of Vetting
Comment: USAID should require PIFs from only ``apparently
successful'' applicants [as opposed to awardees], similar to the
requirements for providing a Branding and Marking Plan as outlined in
22 CFR 226.91 (much more efficient and less burdensome). Requiring
vetting at the applicant stage vastly increases the administrative
burden on NGOs and the invasion of privacy of key individuals in the
applicant organizations.
Response: USAID appreciates the concern expressed in comments about
the most appropriate time in the award cycle to require submission of
the PIF. As stated in the NPRM, ``When USAID determines an award to be
subject to vetting, the agreement officer determines the appropriate
stage of the award cycle to require applicants to submit the completed
USAID Partner Information Form, USAID Form 500-13, to the vetting
official identified in the assistance solicitation. The agreement
officer must specify in the assistance solicitation the stage at which
the applicants will be required to submit the USAID Partner Information
Form, USAID Form 500-13.'' We have carefully weighed the need to allow
as much time as possible for vetting against the burden on applicants
and USAID staff. The rule provides that as a general matter those
applicants who will be vetted typically will be the applicants that
have been determined to be apparently successful. We envision that, to
the extent practicable, the selection and award process will occur
concurrently with vetting. That said, the Rule provides Agreement
Officers with discretion to require applicants to submit the Partner
Information Form at a different stage of the award cycle.
This pilot will implement PVS in five countries with varying levels
of risk. The pilot will help the Agency determine resource
requirements, as well as test the RBA, and other aspects of the PVS
vetting process such as the point in time in the award cycle in which
vetting takes place.
Exemptions to Vetting Requirements
Comment: PVS should include a formal system for exempting vetting
for special circumstances. [We recommend] a formal waiver system that
provides express guidance on the circumstances that warrant special
review and clear deadlines for both NGOs to request a review and USAID
to provide a response. Waiving vetting on an ad hoc basis would result
in inconsistencies and delays in program implementation. Clear language
on the circumstances or types of programs exempted is critical.
Recommendations include clarifying in the rule that the following
are exempt from vetting (1) humanitarian emergencies; (2) democracy and
governance programs; (3) in cases where compliance with vetting would
conflict with a nation's privacy and data protection laws; (4) grants-
under-contract; (5) subrecipients and vendors of commercial items; (6)
beneficiaries, U.S. citizens, and permanent legal residents.]
Regulatory precedence for exemption includes 2 CFR 700.16 (Branding and
Marking) and 2 CFR 25.110 (Reporting under Federal Funding and
Accountability Act). USAID should ensure that the term ``key
individual'' does not include beneficiaries of the programs or
activities funded under the award. The SACFO FY2014 report notes that
``there should also be a provision for waiving the vetting requirements
to prevent delaying responding to humanitarian crises.''
Response: Commenters recommended including a number of specific
exemptions from vetting requirements and requested greater clarity
regarding accommodations that might be made to standardize vetting
procedures in special circumstances. USAID appreciates the concerns of
its partners regarding consistency and expediency in program
implementation and has taken partner concerns into account during the
Agency's guidance and protocol development process. USAID retains the
discretion to address emergency or unique situations on a case-by-case
basis when a vetting requirement would impede USAID's ability to
respond to an emergency situation. For example, it is USAID's intention
that vetting will not prevent the immediate delivery of goods and
services in a humanitarian crisis. Following stabilization, vetting may
occur on a case-by-case basis. Further adjustments to policies and
procedures are possible during implementation of the PVS pilot as
appropriate.
Vendor Contracts/Services and Procurements
Comment: What types of vendor contracts or services would be
subject to vetting?
Vendors and procurements do not fall under the definition of key
individuals and should be removed from vetting. Inclusion of vendors in
the vetting process would be unwieldy and in contradiction to 22 CFR
226.43.
Response: Organizations sought further clarification on the types
of contracts or services that would be subject to vetting. One
recommended that contracts below the simplified threshold of $150,000
and beneficiaries be exempt from vetting. In general, most suppliers
(e.g., commercial suppliers or contractors) will not be subject to
vetting. However, in certain circumstances, USAID may determine that
key individuals of a contractor are subject to vetting. This is
consistent with the requirements of the subpart ``Procurement
Standards'' of 2 CFR 200 where USAID has determined that contracts for
services are subject to vetting since in those cases vetting will be a
requirement that the bidder or offeror must fulfill to be eligible for
an award. Beneficiaries will generally not be vetted unless they are
receiving scholarships, training, cash, or in-kind assistance.
Determination of Successful and Unsuccessful Applicants
Comment: The rule should stipulate that an AO should not be able to
pass on making an award to a candidate until confirmation is received
from the vetting official that the candidate has passed vetting. One
organization recommended that the rule specify that no applicants be
excluded from an award until after vetting has been completed.
Response: USAID agrees with this comment and has amended the final
rule accordingly.
Although the selection process for award proceeds separately from
the vetting process, USAID agrees that excluding an applicant from
consideration for award prior to a vetting determination would not be
appropriate. When an applicant is subject to vetting, the Agreement
Officer will be directed not to make a determination regarding the
inclusion or exclusion of the applicant from award until after the
vetting process is complete.
Ineligible Determinations
Comment: Please clarify the repercussions of failing the vetting
[[Page 36702]]
process. What actions, apart from denying the award, would USAID take?
Would these actions involve other federal agencies, and if so, which
ones? How would the applicant organization and the specific individual
be notified of any actions? Would these actions result in an
investigation by another federal agency?
Response: USAID was asked to clarify the repercussions of failing
the vetting process, including actions that USAID would take, potential
actions taken by other federal agencies, and details on how the
applying organization and the key individual(s) would be notified of
the ineligible determination.
Under the PVS pilot, the vetting official will notify applicants
who are determined to be ineligible for award based on vetting. It is
the responsibility of the AO to notify applicants of the award
decision. Only applicants who are deemed ineligible as a result of the
vetting process may receive an award. In the event that an ineligible
determination has been made, USAID may consult with other U.S.
government agencies and share terrorism information per Executive Order
13388. Information shared will be used to update existing records in
order to protect U.S. citizens and U.S. national security interests.
Re-Vetting
Comment: We are concerned that U.S.-based international
organizations that receive multiple awards in a year will be vetted for
each award as well as annually (if multi-year awards) for each award.
Internal processes would also have to be established to collect,
compile, and safeguard PII for submission. The requirement that PIFs be
collected annually was struck from the final PVS acquisitions rule, and
it should be removed from the assistance rule as well.
Comment: We recommend removing the requirement for annual re-
vetting or re-vetting upon change of key individuals. Perhaps allow the
AO the ability to request re-vetting on a case-by-case basis without
making it an automatic requirement for all implementing partners.
Comment: The frequency of re-vetting is unclear. The proposed rule
makes no mention of duration or validity of a vetting approval,
including when a cleared grantee must be re-vetted (assuming there are
no changes to key individuals).
Response: Some organizations expressed concern that if they receive
multiple awards that each of those awards would be subject to vetting.
Additionally, they noted that USAID's requirement for annual re-vetting
or re-vetting upon change of key individuals would be burdensome.
Another organization requested more clarity on when re-vetting would
occur. USAID has amended the rule to remove annual submittal of the PIF
as a requirement. Recipients will still be required to submit the PIF
any time key individuals change and before issuance of covered
subawards, but will not be required to resubmit the form annually if no
information has changed or expired. Instead, USAID will conduct post-
award vetting based on the latest available submittal.
Reconsideration Process
Comment: The process for appealing a positive match should be
strengthened and clarified. The [reconsideration] period is too short
for the reasonable preparation of a written determination. [A couple of
organizations recommended specific timeframes for applicants to provide
supplementary information to appeal the positive match, ranging from 14
to 21 days.] Moreover, USAID is not required to disclose the reason for
the denial, and there is no requirement that the party evaluating the
redetermination request be different from the party making the initial
determination. Reconsideration procedures should be more open and
accountable, and USAID should include a complete and meaningful
description of the vetting failure to allow an applicant to adequately
rebut any allegations.
Response: Commenters requested that USAID make certain changes to
the reconsideration process in the event of a determination of
ineligibility due to vetting concerns. Specifically, commenters asked
that USAID provide more detail when denying an award due to vetting
concerns, extend the seven-day period provided for appeal, and require
that the Agency official evaluating an appeal be different from the
Agency official that made an initial determination of ineligibility.
Organizations will be given a reason for denial of an award due to
vetting, with a reasonable amount of detail given the nature and source
of the information that led to the decision, and they will be allowed
to challenge the decision as provided in the proposed rule. The amount
of information provided to a denied applicant will depend on the
sensitivity of the information, including whether the information is
classified and whether its release would compromise investigative or
operational interests. USAID cannot disclose classified material or
compromise national security. Upon receipt of a request for
reconsideration, the Agency will also consider any additional
information provided by the applicant.
USAID has determined that a seven-day reconsideration period is
appropriate given the need to ensure that USAID funds and other
resources do not inadvertently benefit individuals or entities that are
terrorists, supporters of terrorists, or affiliated with terrorists,
while also minimizing the impact on USAID programs and its implementing
partners. The seven-day reconsideration period is consistent with the
reconsideration period provided for in the PVS pilot program for USAID
acquisition awards. See 77 FR 8166 (February 14, 2012).
During the PVS pilot, USAID currently plans to elevate
reconsideration of any eligibility determinations to senior policy
makers within the Agency.
USAID recognizes the value of meaningful reconsideration procedures
and is in the process of further defining internal policies regarding
such procedures. Because the pilot is intended to help further refine
and adjust PVS, USAID will continue to evaluate the efficacy of its
reconsideration procedures as part of its assessment of the PVS pilot
program.
Definition of Key Individual
Comment: The definition of ``key individual'' is too vague/very
broad and the decision as to who should be vetted is left up to the AO.
Does the definition of key individuals include both U.S. and non-U.S.
citizens? The definition should be limited, and there should be a cap
on the number of key individuals to be vetted. One commenter
recommended that vetting be limited to key personnel as identified by
the applicant in its proposal, in accordance with the definition
typically used by USG agencies.
Response: Several organizations commented that the definition of
key individual is too vague. The rule provides that, for purposes of
partner vetting, ``key individual'' means the principal officer of the
organization's governing body (for example, chairman, vice chairman,
treasurer, or secretary of the board of directors or board of
trustees); the principal officer and deputy principal officer of the
organization (for example, executive director, deputy director,
president, or vice president); the program manager or chief of party
for the U.S. Government-financed program; and any other person with
significant responsibilities for administration of the U.S. Government-
financed activities or resources, such as key personnel as identified
in the
[[Page 36703]]
solicitation or resulting cooperative agreement. The definition applies
to both U.S. citizens and non-U.S. citizens. Key personnel, whether or
not they are employees of the prime recipient, must be vetted.
Limiting vetting to key personnel would be inadequate for vetting
purposes. The rule uses the term ``key individual'' to describe those
individuals with an ability or potential ability to divert funds. The
term ``key personnel'' designates only those individuals that are
essential to the successful implementation of the program under the
award and does not necessarily include all individuals with an ability
or potential ability to divert funds. The use of the term ``key
individual'' as defined above serves a different purpose than ``key
personnel'' and is essential for USAID to address the potential
diversion of funds under PVS.
Comment: The AIDAR does not separately define ``key personnel'' but
subsumes that term under the term ``key individual.'' In addition, the
AIDAR requires the automatic vetting of all subcontractors for which
consent is required under FAR 52.255-2 while the assistance rule grants
the AO wide discretion in applying vetting procedures to subrecipients
or others.
Response: USAID received a comment that the AIDAR does not define
the term ``key personnel'' and that the AIDAR requires vetting of
subcontractors for which consent is required under FAR 52.255-2, versus
the PVS Assistance Rule, which gives the AO wide discretion in applying
vetting procedures to subrecipients and other entities.
The rules for vetting under assistance and vetting under
acquisition are not and cannot be identical because of the fundamental
difference between acquisition and assistance and the differing rules
and requirements that result from this. Neither the AIDAR nor the
Federal Acquisition Regulation is applicable to Federal assistance.
The term ``key personnel'' is defined for assistance in USAID's
Automated Directive System. The term ``key individual'' is defined in
this rule, since it is applicable to partner vetting. The terms ``key
individual'' and ``key personnel'' are not synonymous. However, all key
personnel are considered key individuals for the purpose of vetting.
Similarly, subawards and the approval of subawards under assistance
differ fundamentally from subcontracts and subcontract consent under
acquisition. Because of these differences, the decision to vet
subawards or not is based on the results of the RBA, which will assess
whether the vetting of a subaward under a particular program is
merited.
When USAID determines that the results of the RBA merit vetting
subrecipients, USAID will require vetting at the time of the initial
award and when the recipient makes new subawards during the grant
period.
Definition of Subaward
Comment: The definition of ``subaward'' needs clarification,
particularly on how it differs from vendors.
Response: Organizations requested that USAID clarify the definition
of ``subaward.'' Subaward is defined at 2 CFR part 200.92 as ``an award
provided by a pass-through entity to a subrecipient for the
subrecipient to carry out part of a Federal award received by the pass-
through entity. It does not include payments to a contractor or
payments to an individual that is a beneficiary of a Federal program. A
subaward may be provided through any form of legal agreement, including
an agreement that the pass-through entity considers a contract.'' The
term ``vendor'' is replaced by the term ``Contractor'' in 2 CFR 200.
``Contract'' is defined at 2 CFR 200.22, and ``Contractor'' is
identified at 2 CFR 200.23.
Burden on Applicants
Comment: The administrative burden estimates are too low (e.g.,
significant additional operational burdens for contractors implementing
grants-under-contracts, replacement of key individuals, completion of
the form, and staffing and recordkeeping costs). The paperwork burden
and cost estimates should be recalculated based on more accurate
assumptions to better reflect the true incremental cost of vetting.
Comment: The paperwork burden and cost estimates are based on
estimated pilot costs, but the proposed amendments to 22 CFR 226 do not
limit the application of the new rules to the pilot only, so the
estimates should reflect the comparable cost of implementing PVS
worldwide.
Response: Commenters expressed concern that USAID's burden estimate
of the proposed collection of information for PVS was inaccurate and
did not reflect the actual administrative and operational burdens that
would be imposed on organizations applying for awards.
USAID addressed similar comments in publishing its final rule
exempting portions of its system of records (Partner Vetting System, or
PVS) from one or more provisions of the Privacy Act. See 74 FR 9
(January 2, 2009). USAID's cost estimates are based in part on the
Agency's existing vetting programs and are meant to serve as a baseline
for the upcoming pilot program. Accordingly, our cost estimate
references costs anticipated to be incurred during the pilot.
In addition to having established a secure portal to streamline the
vetting process and reduce the burden on implementing partners and
Agency personnel, USAID will continue to review policies and procedures
to determine how to further mitigate the operational and administrative
costs for the pilot while achieving its objectives. Furthermore, the
pilot will allow the Agency to get a better sense of the burden on our
implementing partners and to determine what PVS will cost USAID in
terms of dollars and personnel hours. As part of the pilot, USAID will
monitor the impact of PVS on our implementing partners. USAID also
intends to request input from implementing partners on costs incurred
during the pilot so that these costs may be considered in our
evaluation of the pilot.
Comments on the Pilot Evaluation
Comment: USAID should put forth specific evaluation criteria for
the pilot [before the program begins]. How would USAID measure the
burden on recipients and ascertain any negative impacts on program
implementation and/or achievement of foreign assistance objectives?
Will the evaluation consider factors like (1) the number of NGOs that
refuse to apply for or to accept USAID funding due to vetting
requirements, or the number and quality of bids for direct assistance
awards and subcontracts in pilot countries; (2) number of NGOs that
alter program implementation due to the pilot; (3) impact on the safety
and effectiveness of NGOs and their local and national partners (bad
press coverage, threats to staff, effect on local and national NGO
staff retention rates, etc.); (4) number of individuals and NGOs
erroneously identified as being involved in terrorism; and (5) summary
of any legal risks NGOs faced due to compliance with the pilot program.
We request that the evaluation process include substantive engagement
with NGOs to help assess the value and success of the pilot and that
the evaluation be made publicly available.
Response: Some organizations sought further information on
evaluation criteria for the PVS pilot program and requested that USAID
engage with them to help assess the pilot.
[[Page 36704]]
Consistent with our ongoing consultations with implementing
partners, USAID will continue outreach with our partners to assess the
impact of the pilot program. During pilot implementation, we will
solicit feedback from partners participating in the pilot on the extent
to which the pilot has impacted their ability (and that of their local
and national partner organizations) to achieve U.S. foreign assistance
objectives and to implement USAID-funded programs and activities
efficiently and effectively.
As part of our pilot evaluation, we will assess partner feedback
along with data collected from the Agency's Office of Security and
pilot Missions to increase our understanding of the resource
implications and costs related to the pilot in order to inform the
Agency's way forward on partner vetting. USAID intends to include
feedback from our implementing partners in the Agency's final
evaluation report.
Post-Pilot
Comment: Implementation of the pilot should not be codified into
CFR 226 until after the evaluation has been completed with
implementation details modified in line with evaluation results. USAID
should delay further rulemaking on PVS until the pilot program is
completed.
Response: One organization recommended that the rule not be
codified until evaluation of the pilot has been completed so that the
rule can be modified according to the results of the pilot evaluation.
USAID initiated informal rulemaking prior to implementation of the
pilot program to give interested parties the opportunity to comment and
provide feedback on the rule, since the pilot will impact our foreign
assistance programs and activities and the organizations selected to
implement them. USAID determined that rulemaking was the best approach
to ensure that the widest range of views was considered in the design,
implementation, and evaluation of the PVS pilot program.
E. Impact Assessment
Regulatory Planning and Review
Under E.O. 12866, USAID must determine whether a regulatory action
is ``significant'' and therefore subject to the requirements of the
E.O. and subject to review by the Office of Management and Budget
(OMB).
USAID has determined that this Rule is not an ``economically
significant regulatory action'' under Section 3(f)(1) of E.O. 12866.
The application of the Partner Vetting System to USAID assistance will
not have an economic impact of $100 million or more. The regulation
will not adversely affect the economy or any sector thereof,
productivity, competition, jobs, the environment, nor public health or
safety in a material way. However, as this rule is a ``significant
regulatory action'' under Section 3(f)(4) of the E.O., USAID submitted
it to OMB for review. We have also reviewed these regulations pursuant
to Executive Order 13563, which supplements and explicitly reaffirms
the principles, structures, and definitions governing regulatory review
established in Executive Order 12866.
This regulatory action is needed for USAID to meet its fiduciary
responsibilities by helping to ensure that agency funds and other
resources do not inadvertently benefit individuals or entities that are
terrorists, supporters of terrorists or affiliated with terrorists.
NGOs will provide information on key individuals when applying for
USAID grants or cooperative agreements. This information will be used
to screen potential recipients and key individuals. The screening will
help ensure that funds are not diverted to individuals or entities that
are terrorists, supporters of terrorists or affiliated with terrorists.
The final benefit to the public will be the increased assurance that
Federal funds will not inadvertently provide support to entities or
individuals associated with terrorism.
Although the primary benefit of vetting will be to prevent the
diversion of USAID funds, implementing partners will benefit when their
subrecipients have also been vetted and the prime recipient is working
with legitimate organizations. In addition, as the vetting program
becomes better known in the community, it will deter organizations
associated with terrorism from applying for assistance funds.
Based on the average number of applications for USAID's assistance
awards in 2009, 2010, and 2011, USAID estimates that 10,120 applicants
prepare assistance award applications in a given year. Based on
feedback from our implementing partners and on our experience
implementing vetting programs to date, we estimate that the additional
requirements for Partner Vetting will add 75 minutes to each
application. We calculated this burden estimate under the assumptions
that the average form submitted will include information on three key
individuals and that it would take approximately 75 minutes to gather
the necessary information, complete the form, submit the form to USAID,
and respond to requests by USAID for additional information, if
necessary. In the event that the applicant elects direct vetting, this
burden estimate includes the amount of time for applicants to inform
proposed sub-grantees of their responsibility to complete and submit
the form and for those proposed sub-grantees to complete and submit the
form to USAID. The burden estimate also includes the time required for
an applicant or proposed sub-grantee to provide additional vetting
information on new key individuals or new sub-grantees. We recognize
that this burden estimate may overestimate the amount of time required
to comply with vetting requirements. As USAID continues to implement
its vetting programs and obtains more data from those participating in
the vetting process, we may adjust the burden estimate accordingly.
USAID estimates the cost of partner vetting per submission to be
$40.93. This amount is based on the mean hourly wage of an
administrative support employee, as calculated by the U.S. Department
of Labor, Bureau of Labor Statistics, multiplied by the time required
for the administrative support employee to collect the information,
complete the form, submit the form to USAID, and follow up with USAID
on information related to the form (hourly wage rate of $32.74,
multiplied by 75 minutes per form, divided by 60 minutes). USAID
estimates the impact of partner vetting on implementing partners from
completing additional paperwork to be $414,212 annually ($40.93 per
application * 10,120 submissions). USAID would like to emphasize,
however, that this estimate was calculated under the assumption that
all applicants applying for USAID assistance awards are vetted, whereas
only a portion of the Agency's awards are impacted by partner vetting.
No start-up, capital, operation, maintenance, or recordkeeping costs to
applicants are anticipated as a result of this collection.
We estimate USAID's direct labor cost to process assistance
applications for the partner vetting pilot program to be $391,810
annually. This estimate is based on labor costs for four GS-13
positions ($147,680 annually for each position) in the Office of
Security (SEC), five GS-13 vetting officials ($147,680 annually for
each position), and five foreign service nationals ($74,880 annually
for each position). USAID estimates that these positions will expend
approximately 23 percent of their total annual hours on the assistance
portion of the partner vetting pilot program. One of the goals of the
partner vetting pilot program is to
[[Page 36705]]
further understand the actual costs of implementing partner vetting in
various environments. While the figures above reflect USAID's best
estimates of government costs to implement the pilot program for
assistance, the actual figures may be different. The pilot program will
be used to inform our estimates of the costs of partner vetting in
various environments.
USAID has not quantified other costs associated with this rule,
such as indirect costs to organizations participating in our vetting
programs. We have invited implementing partners on an ongoing basis to
provide feedback on issues related to partner vetting, and their
perspectives will be included in our evaluation of the pilot program.
Regulatory Flexibility Act
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601 et seq.), USAID has considered the economic
impact of the rule on applicants and certifies that its provisions will
not have a significant economic impact on a substantial number of small
entities.
The proposed regulations would add the requirement for partner
vetting of key individuals for applicants of USAID-funded assistance
awards into the existing partner vetting system. USAID estimates that
completing an assistance application in response to a Request For
Application takes 200 hours. USAID considers the additional 75 minute
burden on applicants as de minimis and that this does not significantly
increase the burden on grant applicants.
Paperwork Reduction Act
2 CFR 701 uses information collected via USAID Partner Information
Form, USAID Form 500-13, which was approved in accordance with 44
U.S.C. 3501 by the Office of Management and Budget on July 25, 2012
(OMB Control Number 0412-0577).
List of Subjects in 22 CFR 701
Foreign aid, Federal assistance, Non-federal entity, Foreign
organization, Subrecipient, Contractor.
Regulatory Text
For the reasons stated in the preamble, part 701 of title 2,
chapter VII of the Code of Federal Regulations is added to read as
follows:
PART 701--PARTNER VETTING IN USAID ASSISTANCE
Sec.
701.1 Definitions.
701.2 Applicability.
701.3 Partner vetting.
Appendix B to Part 701--Partner Vetting Pre-Award Requirements and
Award Term.
Authority: 22 U.S.C. 2251 et seq.; 22 U.S.C. 2151t, 22 U.S.C.
2151a, 2151b, 2151c, and 2151d; 22 U.S.C. 2395(b).
Sec. 701.1 Definitions.
This section contains the definitions for terms used in this part.
Other terms used in the part are defined at 2 CFR part 200. Different
definitions may be found in Federal statutes or regulations that apply
more specifically to particular programs or activities.
Key individual means the principal officer of the organization's
governing body (for example, chairman, vice chairman, treasurer and
secretary of the board of directors or board of trustees); the
principal officer and deputy principal officer of the organization (for
example, executive director, deputy director, president, vice
president); the program manager or chief of party for the USG-financed
program; and any other person with significant responsibilities for
administration of the USG-financed activities or resources, such as key
personnel as identified in the solicitation or resulting cooperative
agreement. Key personnel, whether or not they are employees of the
prime recipient, must be vetted.
Key personnel means those individuals identified for approval as
part of substantial involvement in a cooperative agreement whose
positions are essential to the successful implementation of an award.
Vetting official means the USAID employee identified in the application
or award as having responsibility for receiving vetting information,
responding to questions about information to be included on the Partner
Information Form, coordinating with the USAID Office of Security (SEC),
and conveying the vetting determination to each applicant, potential
subrecipients and contractors subject to vetting, and the agreement
officer. The vetting official is not part of the office making the
award selection and has no involvement in the selection process.
Sec. 701.2 Applicability.
The requirements established in this part apply to non-Federal
entities, non-profit organizations, for-profit entities, and foreign
organizations.
Sec. 701.3 Partner vetting.
(a) It is USAID policy that USAID may determine that a particular
award is subject to vetting in the interest of national security. In
that case, USAID may require vetting of the key individuals of
applicants, including key personnel, whether or not they are employees
of the applicant, first tier subrecipients, contractors, and any other
class of subawards and procurements as identified in the assistance
solicitation and resulting award. When USAID conducts partner vetting,
it will not award to any applicant who determined ineligible by the
vetting process.
(b) When USAID determines an award to be subject to vetting, the
agreement officer determines the appropriate stage of the award cycle
to require applicants to submit the completed USAID Partner Information
Form, USAID Form 500-13, to the vetting official identified in the
assistance solicitation. The agreement officer must specify in the
assistance solicitation the stage at which the applicants will be
required to submit the USAID Partner Information Form, USAID Form 500-
13. As a general matter those applicants who will be vetted will be
typically the applicants that have been determined to be apparently
successful.
(c) Selection of the successful applicant proceeds separately from
vetting. The agreement officer makes the selection determination
separately from the vetting process and without knowledge of vetting-
related information other than that, based on the vetting results, the
apparently successful applicant is eligible or ineligible for an award.
However, no applicants will be excluded from an award until after
vetting has been completed.
(d) For those awards the agency has determined are subject to
vetting, the agreement officer may only award to an applicant that has
been determined to be eligible after completion of the vetting process.
(e)(1) For those awards the agency has determined are subject to
vetting, the recipient must submit the completed USAID Partner
Information Form any time it changes:
(i) Key individuals; or
(ii) Subrecipients and contractors for which vetting is required.
(2) The recipient must submit the completed Partner Information
Form within 15 days of the change in either paragraph (e)(1)(i) or (ii)
of this section.
(f) USAID may vet key individuals of the recipient, subrecipients
and contractors periodically during program implementation using
information already submitted on the Form.
(g) When the prime recipient is subject to vetting, vetting may be
required for key individuals of subawards when the prime recipient
requests prior approval in accordance with 2 CFR 200.308(c)(6) for the
[[Page 36706]]
subaward, transfer, or contracting out of any work.
(h) When the prime recipient is subject to vetting, vetting may be
required for key individuals of contractors of certain services. The
agreement officer must identify these services in the assistance
solicitation and any resulting award.
(i) When vetting of subawards is required, the agreement officer
must not approve the subaward, transfer, or contracting out, or the
procurement of certain classes of items until the organization subject
to vetting has been determined eligible. When vetting of contractors is
required, the recipient may not procure the identified services until
the contractor has been determined to be eligible.
(j) The recipient may instruct prospective subrecipients or, when
applicable contractors who are subject to vetting to submit the USAID
Partner Information Form to the vetting official as soon as the
recipient submits the USAID Partner Information Form for its key
individuals.
(k) Pre-award provision and award term.
(1) The agreement officer must insert the pre-award provision
Partner Vetting Pre-Award Requirements in Appendix B of this part in
all assistance solicitations USAID identifies as subject to vetting.
(2) The agreement officer must insert the award term Partner
Vetting in Appendix B in all assistance solicitations and awards USAID
identifies as subject to vetting.
Appendix B to Part 701--Partner Vetting Pre-Award Requirements and
Award Term
Partner Vetting Pre-Award Requirements
(a) USAID has determined that any award resulting from this
assistance solicitation is subject to vetting. An applicant that has
not passed vetting is ineligible for award.
(b) The following are the vetting procedures for this
solicitation:
(1) Prospective applicants review the attached USAID Partner
Information Form, USAID Form 500-13, and submit any questions about
the USAID Partner Information Form or these procedures to the
agreement officer by the deadline in the solicitation.
(2) The agreement officer notifies the applicant when to submit
the USAID Partner Information Form. For this solicitation, USAID
will vet [insert in the provision the applicable stage of the
selection process at which the Agreement Officer will notify the
applicant(s) who must be vetted]. Within the timeframe set by the
agreement officer in the notification, the applicant must complete
and submit the USAID Partner Information Form to the vetting
official. The designated vetting official is:
Vetting official:------------------------------------------------------
Address:---------------------------------------------------------------
Email:-----------------------------------------------------------------
(for inquiries only).
(3) The applicants must notify proposed subrecipients and
contractors of this requirement when the subrecipients or
contractors are subject to vetting.
Note: Applicants who submit using non-secure methods of
transmission do so at their own risk.
(c) Selection proceeds separately from vetting. Vetting is
conducted independently from any discussions the agreement officer
may have with an applicant. The applicant and any proposed
subrecipient or contractor subject to vetting must not provide
vetting information to anyone other than the vetting official. The
applicant and any proposed subrecipient or contractor subject to
vetting will communicate only with the vetting official regarding
their vetting submission(s) and not with any other USAID or USG
personnel, including the agreement officer or the agreement
officer's representatives. The agreement officer designates the
vetting official as the only individual authorized to clarify the
applicant's and proposed subrecipient's and contractor's vetting
information.
(d)(1) The vetting official notifies the applicant that it: (i)
Is eligible based on the vetting results, (ii) is ineligible based
on the vetting results, or (iii) must provide additional
information, and resubmit the USAID Partner Information Form with
the additional information within the number of days the vetting
official specified in the notification.
(2) The vetting official will coordinate with the agency that
provided the data being used for vetting prior to notifying the
applicant or releasing any information. In any determination for
release of information, the classification and sensitivity of the
information, the need to protect sources and methods, and the status
of ongoing law enforcement and intelligence community investigations
or operations will be taken into consideration.
(e) Reconsideration: (1) Within 7 calendar days after the date
of the vetting official's notification, an applicant that vetting
has determined to be ineligible may request in writing to the
vetting official that the Agency reconsider the vetting
determination. The request should include any written explanation,
legal documentation and any other relevant written material for
reconsideration.
(2) Within 7 calendar days after the vetting official receives
the request for reconsideration, the Agency will determine whether
the applicant's additional information merits a revised decision.
(3) The Agency's determination of whether reconsideration is
warranted is final.
(f) Revisions to vetting information: (1) Applicants who change
key individuals, whether the applicant has previously been
determined eligible or not, must submit a revised USAID Partner
Information Form to the vetting official. This includes changes to
key personnel resulting from revisions to the technical portion of
the application.
(2) The vetting official will follow the vetting process of this
provision for any revision of the applicant's Form.
(g) Award. At the time of award, the agreement officer will
confirm with the vetting official that the apparently successful
applicant is eligible after vetting. The agreement officer may award
only to an apparently successful applicant that is eligible after
vetting.
Partner Vetting
(a) The recipient must comply with the vetting requirements for
key individuals under this award.
(b) Definitions: As used in this provision, ``key individual,''
``key personnel,'' and ``vetting official'' have the meaning
contained in 22 CFR 701.1.
(c) The Recipient must submit within 15 days a USAID Partner
Information Form, USAID Form 500-13, to the vetting official
identified below when the Recipient replaces key individuals with
individuals who have not been previously vetted for this award.
Note: USAID will not approve any key personnel who are not eligible
for approval after vetting. The designated vetting official is:
Vetting official:------------------------------------------------------
Address:---------------------------------------------------------------
Email:-----------------------------------------------------------------
(for inquiries only).
(d)(1) The vetting official will notify the Recipient that it--
(i) Is eligible based on the vetting results,
(ii) Is ineligible based on the vetting results, or
(iii) Must provide additional information, and resubmit the
USAID Partner Information Form with the additional information
within the number of days the vetting official specifies.
(2) The vetting official will include information that USAID
determines releasable. USAID will determine what information may be
released consistent with applicable law and Executive Orders, and
with the concurrence of relevant agencies.
(e) The inability to be deemed eligible as described in this
award term may be determined to be a material failure to comply with
the terms and conditions of the award and may subject the recipient
to suspension or termination as specified in the subpart ``Remedies
for Noncompliance'' at 2 CFR part 200.
(f) Reconsideration: (1) Within 7 calendar days after the date
of the vetting official's notification, the recipient or prospective
subrecipient or contractor that has not passed vetting may request
in writing to the vetting official that the Agency reconsider the
vetting determination. The request should include any written
explanation, legal documentation and any other relevant written
material for reconsideration.
(2) Within 7 calendar days after the vetting official receives
the request for reconsideration, the Agency will determine whether
the recipient's additional information merits a revised decision.
(3) The Agency's determination of whether reconsideration is
warranted is final.
[[Page 36707]]
(g) A notification that the Recipient has passed vetting does
not constitute any other approval under this award.
Alternate I. When subrecipients will be subject to vetting, add
the following paragraphs to the basic award term:
(h) When the prime recipient anticipates that it will require
prior approval for a subaward in accordance with 2 CFR 200.308(c)(6)
the subaward is subject to vetting. The prospective subrecipient
must submit a USAID Partner Information Form, USAID Form 500-13, to
the vetting official identified in paragraph (c) of this provision.
The agreement officer must not approve a subaward to any
organization that has not passed vetting when required.
(i) The recipient agrees to incorporate the substance of
paragraphs (a) through (i) of this award term in all first tier
subawards under this award.
Alternate II. When specific classes of services are subject to
vetting, add the following paragraph:
(j) Prospective contractors at any tier providing the following
classes of services
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-----------------------------------------------------------------------
must pass vetting. Recipients must not procure these services until
they receive confirmation from the vetting official that the
prospective contractor has passed vetting. (End of award term)
Angelique M. Crumbly,
Assistant Administrator, Bureau for Management.
[FR Doc. 2015-15017 Filed 6-25-15; 8:45 am]
BILLING CODE 6116-02-P