NGOs Raise Concerns about USAID's Proposed Vetting Policy for Contractors

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August 28, 2009

On Aug. 25, 2009, several nonprofit groups submitted comments highlighting concerns about USAID’s proposal to apply its Partner Vetting System (PVS) to contractors in acquisitions. Labeling provisions in the proposal incomplete and “inappropriate,” the comments call for additional dialogue and collaboration between USAID and the nonprofit sector before implementation. The comments echo similar complaints made about the PVS for NGOs.

Click here to view a Comparison Chart of the Proposed Partner Vetting Systems for NGOs and Contractors

“We urge USAID to delay any implementation of PVS until it has conducted a thorough review of the program.  This approach would be responsive to concerns raised by the nonprofit sector as well in the Senate State, Foreign Operations Appropriations Committee. On July 9, 2009 the committee passed a bill (S. 1434) seeking a “comprehensive review” of PVS.”

The comments describe the proposed PVS for contractors as a source of potential problems that “outweigh any benefits gained.” The comments focused on the following points:

1. USAID has not adequately defined key terms in the rule: “The proposed rule fails to clearly describe the outcome it is trying to avoid.  It refers to but does not explain what is meant by diversion of funds, an "inadvertent benefit" to terrorists or who is "otherwise associated with" them.”

2. PVS would inappropriately use private contractors and NGOs as government investigators, endangering the safety of their employees: "PVS would require contractors and NGOs to collect and submit highly personal information…to be checked against secret intelligence databases.  The practical effect will be to use contractors and NGOs as government intelligence gathering tools.” 

3. Due diligence conducted by NGOs would be a superior approach to vetting than list checking:
“PVS exacerbates problems with list checking by "including people or organizations that are not specifically designated by the U.S. Government but who may nevertheless be linked to terrorist activities."  This means that secret lists with different standards for why people are listed and how the information is intended to be used will be used.” 

4. The contractor rule provides benefits not available in the NGO rule: “The proposed rule for contractors limits application of PVS to situations where USAID has conducted a risk assessment and determined there is a need for enhanced vetting. In contrast, PVS is imposed on all NGOs, regardless of risk.”

“In the proposed contractor rule USAID appropriately states that its goal is a rule that "minimizes the impact on our programs and contractors while still protecting against the possibility that USAID funds could benefit terrorist groups."  USAID has not stated this as a goal for its rule for NGOs.”

“The proposed appeal/reconsideration process for contractors is more specific than the process USAID has provided for NGOs.”
Nonprofit groups from around the country, Defending Dissent Foundation, Grantmakers Without Borders, Grassroots International, International Center for Not-for-Profit Law and OMB Watch signed the comments.