Testimony submitted by
David J. Berteau, President and CEO of the Professional Services Council
to the Senate Foreign Relations Committee
Subcommittee
on State Department and USAID Management,
International Operations, and Bilateral International Development
Hearing on USAID Localization: Challenges, Opportunities, and Next Steps to Further
Development Initiatives at the Local Level
March 9, 2023
Chairman Cardin and Ranking Member Hagerty:
The Professional Services Council (PSC) represents more than 440 U.S. government contractors providing
critical technology and professional services to every federal agency. PSC’s Council of International Development
Companies (CIDC) represents those PSC member companies that work with the
U.S. Agency for International Development (USAID) and the U.S. Department of
State to support effective U.S. foreign assistance programs around the world.
PSC commends the Senate Foreign Relations Committee
(SFRC) for its continued support for and oversight of these programs, including
the policies, processes, and resources required to provide timely, needed
assistance that is aligned with U.S. national interests. This hearing provides an excellent opportunity
for this committee to examine ways to help ensure that communities receiving
assistance both want the aid and are able to implement development
programs in a manner consistent with U.S. legislation and procurement
regulations. I thank you for the opportunity to provide PSC’s comments and
suggestions in this regard.
By way of background, our members listened
with great interest to USAID Administrator Samantha Power’s November 4, 2021, speech
at Georgetown University, in which she stated:
[I]n
addition to a 25 percent target of our assistance going to local partners,
today I’m announcing that by the end of the decade, 50 percent of our
programming, at least half of every dollar we spend, will need to place local
communities in the lead to either co-design a project, set priorities, drive
implementation, or evaluate the impact of our programs.
As development professionals, some with
more than four decades of experience working for USAID, CIDC members fully
embrace this call for improved local engagement and participation. Their experience has taught them that without
significant local partner engagement in project development and implementation,
the achievement of long-term sustainable goals is virtually impossible. In recognition of this reality, almost all of
USAID’s solicitations have for years now required significant, explicit local
engagement requirements and metrics.
In support of these requirements, PSC
shared with USAID officials two CIDC white papers with insights on USAID’s locally-led development
agenda and recommendations for ways in which the Agency can better track and
report support for local stakeholders.
The papers showcased how USAID implementing partners, including CIDC
members, have accelerated the Agency’s progress in support of locally-led
development over recent decades. These
implementing partners are already doing much to reach Administrator
Power’s stated goals.
Since submitting these papers to the Agency,
our members have had numerous conversations with officials regarding on-the-ground
experiences, suggestions, and other feedback. PSC applauds the Agency for this outreach and
engagement, and our members plan to continue sharing insights on localization
issues with USAID officials.
At the same time, we believe the Agency
must examine closely those structures, procedures, and requirements that create
significant dampening effects on potential new entrants into the international
development ecosystem. These
requirements erect barriers to entry that deter not only potential new local
partners, but also American ones as well, particularly small businesses.
Administrator Power has made “Bureaucratic
Burden Busting” a key driver in her reform efforts. As she noted at the
swearing in of a senior USAID official in October 2022:
[T]hese major reform priorities depend upon our
ability to cut the time our staff spends filling out paperwork, increasing the
time they’re able to spend in the field and with our partner organizations. And so we will look to Clinton to help
spearhead our bureaucracy busting initiative, with the goal of saving our
Agency staff members millions of hours collectively. Our Agency already tackles the world’s
toughest challenges. Needless bureaucracy should not be one of them.
Her remarks highlight the fact that, given
the complexities of the U.S. Government procurement process and rules, too
often only those entities with significant, demonstrated and documented past
performance implementing USAID programs—and with abundant legal, accounting,
and other specialized back-office staff—are able to meet U.S. Government
requirements and compete successfully in the current federal marketplace. Reporting requirements consume countless staff
hours and company resources even as they enable American implementing partners
to account for every penny in order to ensure Congress and the American people
that their generosity is accounted for. For
localization to realize increased success, USAID will need to determine on a country-by-country,
program-by-program basis whether local firms have the capacity to meet these
requirements. We believe these
determinations should be of particular interest to Congress.
Administrator Power recognized this in her
2021 Georgetown address:
[W]orking
with local partners, it turns out, is more difficult, time-consuming, and it’s
riskier. Local partners often lack the
internal accounting expertise our contracts require, or they might lack the
legal counsel needed to shape their contracts, many of which can run hundreds
of pages long.
PSC suggests that the Committee consider
directing a Government Accountability Office study to explore the impact of these
constraints on potential contracting partners—both American and local. Such an assessment could help enumerate and illustrate
these barriers more clearly and set the stage for potential actions to reduce,
as appropriate, overly burdensome and unnecessary requirements Such actions
could not only support localization efforts, they could lead to better outcomes
as well.
In addition, PSC believes a key impediment
to the most efficient, effective implementation of USAID programs, including
localization efforts, has historically been the absence of a sufficient number
of trained, experienced contracting officers tasked with reviewing, evaluating,
and awarding projects that are vital to delivering assistance. We call attention to Administrator Power’s cogent
expression of this point in 2021 congressional testimony, in which she
highlighted the disparity in USAID and Department of Defense workload:
Over
the last two decades, the funding levels and complexity of our programs has
expanded at a rate that significantly outpaces our staffing. For instance, each USAID contracting
officer…has managed over $65 million annually over the past four years, more
than four times the workload of their colleagues at the Department of Defense
who manage an average of about $15 million. Moving forward, we are seeking not a return to
the previous status quo, but to work with members of Congress to increase our
number of direct hires, while maintaining a strong focus on creating a more
diverse, equitable, and inclusive Agency. With your support, USAID will move
aggressively to tackle the world’s toughest challenges in order to build a more
stable and prosperous future for us all. (emphasis added)
PSC urges the Committee to continue to
provide USAID with both the funding and the hiring flexibility to provide, as
appropriate, a sufficient number of contracting officers needed to implement the
required workload.
In summary, success in localization hinges
on local capability to comply with U.S. procurement regulations and the ability
of USAID officials to obligate needed funding under contracts. Thank you for the opportunity to submit this
written statement, and we at PSC welcome any further engagement and dialogue
with the committee on these key issues.
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