Comments of Nonprofit Organizations on Proposed Partner Vetting in USAID Acquisitions
United States Agency for International Development
RIN 0412-AA63

August 25, 2009

The undersigned organizations submit these comments on USAID’s proposal to apply its Partner Vetting System (PVS) to contractors in acquisitions.  We appreciate the opportunity to comment and strongly support the goal of protecting USAID resources from being appropriated by terrorist organizations.  However, we believe the PVS program, as currently conceived, is not an effective approach to achieving this goal.  The problems it creates far outweigh any benefits gained.

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.   S. 1434 would halt implementation pending a full review by the yet-to-be named USAID Administrator.  It mandates nongovernmental organization (NGO) involvement in further inquiry of the “scope, methodology and effect” of PVS.

In support of this position these comments make the following points:

  • USAID has not adequately defined key terms in the rule

  • PVS would inappropriately use private contractors and NGOs as government investigators, endangering the safety of their employees

  • Due diligence conducted by NGOs would be a superior approach to vetting than list checking

  • The contractor rule provides benefits not available in the NGO rule

USAID has not adequately defined key terms in the rule

USAID can achieve its stated goal with a more precise process that addresses clearly defined problems.  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.  It is not clear what may be an incidental benefit or what constitutes a substantial one.  Similarly the proposed rule does not clarify how remote or close an association must be to invoke USAID’s concern.  This vagueness fails to notify the public of what is and is not acceptable, and is vulnerable to inconsistent or arbitrary implementation.

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 on their governing boards and key employees, for themselves and their subcontractors and subgrantees to be checked against secret intelligence databases.  The practical effect will be to use contractors and NGOs as government intelligence gathering tools. This is an inappropriate government intrusion into private entities.  The U.S. government can and should conduct its own intelligence gathering efforts.

PVS information gathering will create an impression in countries where USAID operates programs that contractors and NGOs are working for the U.S. government.  This can increases the danger that employees may be kidnapped and murdered. This danger is already at unacceptable levels.  In 2008 alone 260 humanitarian aid workers were killed, kidnapped or seriously injured in violent attacks. This toll is the highest in the 12 years of the Center of International Cooperation and the Overseas Development Institute began tracking these incidents.  USAID programs cannot function effectively if they increase these dangers.

Due diligence conducted by NGOs would be a superior approach to vetting than list checking

In the Background Information in the proposed rule, USAID said “More can be done to ensure adequate due diligence.”  That is always desirable.  However, the problem with PVS is that it substitutes massive collection of personal data for the kind of on-the-ground due diligence that has proven effective in the past.  USAID would be better served to restructure a vetting system based on traditional due diligence practices.
The PVS model of “vetting” assumes that computers that sift through multiple databases are superior to the essential human elements of due diligence:  personal relationships, on the ground experience and thorough financial oversight.  List checking strategies have been rejected by National Research Council of the National Academy of Science in a recent study, Protecting Individual Privacy in the Struggle Against Terrorists (2008).  These experts said,
“[H]ighly automated tools and techniques cannot be easily applied to the much more difficult problem of detecting and preempting a terrorist attack, and success may not be possible at all…Because the data being analyzed are primarily about ordinary, law-abiding citizens and businesses, false positives can result in invasion of privacy.  Such intrusions raise valid concerns about the misuse and abuse of data…”
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. Since USAID will limit information provided when an entity fails vetting, there will not be an adequate opportunity for contractors or NGOs to respond.

The contractor rule provides benefits not available in the NGO rule

It is appropriate for USAID to apply its final vetting rules to both foreign assistance programs (NGOs) and acquisition (contractors).  To the extent possible, PVS should be the same for both.  However, the proposed rule for contractors provides several benefits not available to NGOs in the foreign assistance rule.  For example:

  • Risk assessment:  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. No justification for this difference has been offered, and we do not believe there is one.  To be consistent and fair, the risk assessment provision should apply to NGOs as well, regardless of the final structure of the vetting system.

  • Minimizing impact: 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, despite substantial comments attesting to the negative impact PVS would have on them.  Fairness requires USAID to have a consistent standard, which should be the higher one afforded contractors.

  • Appeals process:  The proposed appeal/reconsideration process for contractors is more specific than the process USAID has provided for NGOs.  For example, the seven day time for contractors to appeal and the requirement that USAID provide a decision within seven days is more reasonable than the open ended times provided for NGOs.  Delays can cause serious problems for program implementation and should be avoided.  The contractor rule provides another opportunity not given NGOs: to resubmit the form with additional information prior to a decision on whether or not it passes vetting. Both NGOs and contractors should have this opportunity.


The fundamental flaws in the current design of USAID’s Partner Vetting System should be reconsidered and redesigned before it is extended to contractors and acquisitions.  Because we share the common goal of protecting USAID resources from falling into the hands of terrorist organizations, it is both possible and preferable to work together for a better outcome.
Thank you.

Sue Udry, Director
Defending Dissent Foundation
Silver Spring, MD
Douglas Rutzen, President
International Center for Not-for-Profit Law
Washington, DC
John Harvey, Executive Director
Grantmakers Without Borders
San Francisco, CA
Lee Mason, Director, Nonprofit Speech Rights
OMB Watch
Washington, DC
Nikhil Aziz, Executive Director
Grassroots International
Boston, MA