Government Affairs and Advocacy

Dear members:

In Spring 2021, Humentum hosted a meeting with USAID's Office of the Ombudsman. During that meeting, members submitted questions for the Ombudsman's consideration. Some of the questions were answered or partially answered in late 2021 and have been posted to this Channel previously. Here are the outstanding responses that that the Ombudsman's Office just provided. Please advise if you have questions or concerns. 
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1. Randy Tift discussed process of revisions for new partnerships (?) Which policies were impacted and are any underway?

• • USAID Response: NPI was launched in 2019 as an effort to operationalize the principles articulated in the Acquisition and Assistance Strategy, primarily 'Diversifying the Partner Base' and 'Changing How we Partner.' NPI's focus on lowering barriers to entry to working with USAID, supporting greater local engagement, enhancing local capacity development, and expanding the use of co-creation. NPI prioritizes three partnership approaches.

1. Direct awards to nontraditional partners, including:
   1. Local entities and local government institutions;
   2. Locally established partners; and
   3. Non-local organizations.
2. Awards to organizations that subaward more than 50 percent of the total award value; and
3. Awards to organizations that provide cash leverage.

There are several key terms that define the parameters of NPI.

New Partner: An individual or organization that has not received any funding from USAID as a prime partner over the last five years.

Underutilized Partner: An organization that has received less than $25 million in direct or indirect awards from USAID over the past five years.

Local Entity: An individual or organization that: 

Is legally organized under the laws of a country that is receiving assistance from USAID; 
Has its principal place of business or operations in a country receiving assistance from USAID;
Is majority-owned by individuals who are citizens or lawful permanent residents of a country receiving assistance from USAID; and
Is managed by a governing body, the majority of whom are citizens or lawful permanent residents of the country receiving assistance from USAID.

Locally Established Partner (LEP): A U.S. or international organization that works through locally led operations and programming models. LEPs: 

Have maintained continuous operations in-country for at least five years and materially demonstrate a long-term presence in a country through adherence or alignment to the following:

8. • Local staff comprises at least 50% of office personnel;
   • Maintenance of a dedicated local office;
   • Registration with the appropriate local authorities,
   • A local bank account; and
   • A portfolio of locally implemented programs.
   • Have demonstrated links to the local community, including:
     
     • If the organization has a governing body or board of directors, then it must include a majority of local citizens (in the host country, this is not required);
     • A letter of support from a local organization to attest to its work; and
     • Other criteria that an organization proposes to demonstrate its local roots.

Leverage: Significant resources mobilized from non-U.S. Government sources. USAID seeks the mobilization of resources of other actors on a 1:2 or greater basis (i.e., 50 percent of the proposed value of the award). Leveraged resources may include grants/awards from non-U.S. Government organizations or other donor governments.

To date, USAID has formed 29 partnerships with nearly 60 organizations, valued at over $400 million through the New Partnerships Initiative. 

2. "USAID RAA28. Award Term and Condition for Recipient Integrity and Performance Matters (APRIL 2016)

A USAID implementing partner wanted to confirm that USAID RAA28 "does not apply to subs and, therefore, does not need to be flowed down, given there is no applicability statement regarding subs around it." They assumed RAA28 was directed to primes, and applies to direct funding from USG, not pass-through funding. They also wondered, given the lack of SAM registration requirements, how a sub would comply with the reporting requirement, if that was indeed necessary. They posed this question to our broader community, which responded that "There appears to be a conflict between the revised SAM requirements (i.e. if you are sub, you only need a unique identifier) and RAA28 (RAA29 in the Non-US provisions), which does not differentiate between prime or sub, but states; "APPLICABILITY: This provision must be incorporated into awards if the total federal share of the award may include more than $500,000 over the period of performance. CONTRACT AWARD TERM AND CONDITION FOR RECIPIENT INTEGRITY AND PERFORMANCE MATTERS (April 2016) and UNIVERSAL IDENTIFIER AND SYSTEM FOR AWARD MANAGEMENT (NOVEMBER 2020) are each grounded in regulation/law. RAA6 derives from 2 CFR 25 and RAA28 derives from section 872 of Public Law 110-417, as amended (41 U.S.C. 2313)." They had the impression one would have to comply with each law, citing that USAID requires organizations to flow down RAA28 if they are making a subaward to a recipient with a ceiling value of $500k+.   "If the subrecipient's "total value of...currently active grants, cooperative agreements, and procurement contracts from all Federal awarding agencies exceeds $10,000,000 for any period of time during the period of performance of this Federal award", then the subrecipient must maintain a SAM registration in order to report the required information in RAA28." 

They believed that one would be completely reliant on the sub to self-report in terms of understanding when that threshold is met. It would be possible to monitor the applicability of the Single Audit to get a sense of the total value of their awards from the Schedule of Expenditures of Federal Funds (SEFA), but that would not provide the total award value at any period of time. Further, they explained, because not all primes comply with FFATA reporting, one will not necessarily know the full value of their awards through a search of usaspending.gov.  

Their recommendation at first was: "If a sub qualifies for the single audit, but is not registered in sam.gov, remind them of the requirement and pay attention to any news of big wins." 

Through contact with USAID, they were directed to 2 CFR 200.111 (only applicable to the agency, not pass-through entities, and only to primes, not subrecipients), 2 CFR 200.113 (applicable to non-federal entities, not just recipients, when Appendix XII is in the T&C's) and to 2 CFR 200 Appendix XII (which only references "recipients", and not "non-federal entity") as the source of the RAA provision.  

Two questions followed: 

"Why would 200.113 be broadly defined, but Appendix XII narrowly defined (i.e. "recipient")? If there is a conflict between the two, which section takes precedence? 

And, 

"From a practicality standpoint, how many subrecipients with over $10 million in federal awards at any given time do not have a prime award (i.e. are not already registered in SAM?) 

 Clarification on those two points, and anything else herein which may warrant expansion, would be much appreciated.

• USAID Response: Unfortunately, USAID is not the author of this language and we are not in a position to provide clarity.  If there is any ambiguity with the award term the recipient must consult with their legal counsel or reach out to OMB as OMB is the regulatory source of this language.  Although these requirements are listed in our standard provision packages 303maa and 303mab as RAA 28 and 29, respectively; they are actually regulatory in nature.  Both of these standard provisions are directly from OMB's 2 CFR 200's Appendix XII to Part 200 - Award Term and Condition for Recipient Integrity and Performance Matters.  Only OMB can provide the level of clarity the recipient is seeking here.  

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Cynthia Smith
Director, Government Affairs and Advocacy
Humentum
cynthia.smith@humentum.org
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