[Senate Hearing 118-102]
[From the U.S. Government Publishing Office]
S. Hrg. 118-102
USAID LOCALIZATION: CHALLENGES, OPPORTUNI-
TIES, AND NEXT STEPS TO FURTHER DEVELOP-
MENT INITIATIVES ON THE LOCAL LEVEL
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HEARING
BEFORE THE
SUBCOMMITTEE ON STATE
DEPARTMENT AND USAID
MANAGEMENT, INTERNATIONAL
OPERATIONS, AND BILATERAL
INTERNATIONAL DEVELOPMENT
OF THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
MARCH 9, 2023
__________
Printed for the use of the Committee on Foreign Relations
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
53-433 PDF WASHINGTON : 2023
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COMMITTEE ON FOREIGN RELATIONS
ROBERT MENENDEZ, New Jersey, Chairman
BENJAMIN L. CARDIN, Maryland JAMES E. RISCH, Idaho
JEANNE SHAHEEN, New Hampshire MARCO RUBIO, Florida
CHRISTOPHER A. COONS, Delaware MITT ROMNEY, Utah
CHRISTOPHER MURPHY, Connecticut PETE RICKETTS, Nebraska
TIM KAINE, Virginia RAND PAUL, Kentucky
JEFF MERKLEY, Oregon TODD YOUNG, Indiana
CORY A. BOOKER, New Jersey JOHN BARRASSO, Wyoming
BRIAN SCHATZ, Hawaii TED CRUZ, Texas
CHRIS VAN HOLLEN, Maryland BILL HAGERTY, Tennessee
TAMMY DUCKWORTH, Illinois TIM SCOTT, South Carolina
Damian Murphy, Staff Director
Christopher M. Socha, Republican Staff Director
John Dutton, Chief Clerk
SUBCOMMITTEE ON STATE DEPARTMENT AND USAID
MANAGEMENT, INTERNATIONAL OPERATIONS, AND
BILATERAL INTERNATIONAL DEVELOPMENT
BENJAMIN L. CARDIN, Maryland, Chairman
TIM KAINE, Virginia BILL HAGERTY, Tennessee
CORY A. BOOKER, New Jersey PETE RICKETTS, Nebraska
CHRISTOPHER A. COONS, Delaware TED CRUZ, Texas
CHRISTOPHER MURPHY, Connecticut RAND PAUL, Kentucky
(ii)
C O N T E N T S
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Page
Cardin, Hon. Benjamin L., U.S. Senator From Maryland............. 1
Hagerty, Hon. Bill, U.S. Senator From Tennessee.................. 3
Sumilas, Michele, Assistant to the Administrator, Bureau for
Policy,
Planning, and Learning, U.S. Agency for International
Development,
Washington, DC................................................. 4
Prepared Statement........................................... 7
Steiger, Dr. Bill, Global Health Consultant, George W. Bush
Institute,
Washington, DC................................................. 25
Prepared Statement........................................... 27
Aquino, Elana, U.S. Executive Director, Peace Direct. Washington,
DC............................................................. 36
Prepared Statement........................................... 38
O'Keefe, Bill, Executive Vice President for Mission, Mobilization
and
Advocacy, Catholic Relief Services, Baltimore, MD.............. 44
Prepared Statement........................................... 45
Additional Material Submitted for the Record
Responses of Ms. Michele Sumilas to Questions Submitted by
Senator
Benjamin L. Cardin............................................. 56
Responses of Ms. Elana Aquino to Questions Submitted by Senator
Benjamin L. Cardin............................................. 59
Responses of Mr. Bill O'Keefe to Questions Submitted by Senator
Benjamin L. Cardin............................................. 62
Prepared Statement of Dr. Tessie San Martin, CEO FHI 360 and Co-
Chair, Modernizing Foreign Assistance Network (MFAN)........... 62
Article Titled, ``Metrics Matter: How USAID Counts `Local' Will
Have a Big Impact on Funding for Local Partners,'' by Publish
What You Fund, Dated March 2023................................ 65
Prepared Statement of David J. Berteau, President and CEO of the
Professional Services Council.................................. 69
Prepared Statement of Allassane Drabo, Search for Common Ground.. 70
(iii)
USAID LOCALIZATION: CHALLENGES, OPPORTUNITIES, AND NEXT STEPS TO
FURTHER DEVELOPMENT INITIATIVES ON THE LOCAL LEVEL
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THURSDAY, MARCH 9, 2023
U.S. Senate,
Subcommittee on State Department and USAID
Management, International Operations, and Bilateral
International Development,
Committee on Foreign Relations,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:31 a.m., in
room SD-419, Dirksen Senate Office Building, Hon. Benjamin J.
Cardin, presiding.
Present: Senators Cardin [presiding], Coons, Booker,
Hagerty, and Ricketts.
OPENING STATEMENT OF HON. BENJAMIN L. CARDIN,
U.S. SENATOR FROM MARYLAND
Senator Cardin. The subcommittee will come to order.
This is the Subcommittee for State Department and USAID
Management, International Operations, and Bilateral
International Development. That is quite a title.
Welcome to our first hearing of this Congress. The
subcommittee's jurisdiction is broad and our principal
responsibility is oversight, oversight of the State Department,
the USAID, U.S. Agency for Global Media, the Peace Corps, the
Millennium Challenge Corporation.
We have a lot of work to do, and we intend to be very
active during this Congress and I say ``we'' because Senator
Hagerty and I are partners in this effort on oversight.
We joined together in the last Congress and we concentrated
more on the State Department, and I think we were able to get
some significant progress made in the State Department on
several areas including training and we intend to do the same
type of work during this Congress together on the oversight of
the agencies to make sure that Congress is a full partner and
the agencies being able to carry out their mission and to make
the types of recommendations we think that can be helpful in
carrying out that responsibility.
I am extremely fortunate to have Senator Hagerty as my
partner. He understands the challenges through his experience
as Ambassador to Japan.
We have had a chance to talk about that on many occasions
and it really is a pleasure to have him as my co-leader on this
committee, and thank you very much for your help in that
regard.
Our first hearing will be on the USAID localization--
challenges, opportunities, the next step, and further
development initiatives on the local level.
This is a subject that does not get the type of attention
that we think it needs to get because we know that locally-led
development gives the ability of the local communities to
become self-sufficient to sustain their operations.
We know Administrator Power has made this a priority for
USAID. There are major advantages to moving forward on local
capacity and the challenge is that today's numbers are about 6
percent of the resources are used in local development.
Administrative Power indicates she wants that number to be
increased to 25 percent over a 4-year period.
That is an ambitious goal. The question is how do we get
there and part of it is in the definition of what is local
actors. The USAID's definition encompasses individuals,
communities and networks, organizations, private entities, and
governments set their own agendas, develop solutions that bring
capacity, leadership, and resources to make those solutions a
reality. That is a quote from the USAID.
We are going to talk a little bit about that because we
recognize that localization--in some cases there is a
disagreement as to what is local. We will have a chance to talk
a little bit more about that.
Challenges in carrying out localization, first and
foremost, is resources--do you have the capacity to be able to
carry out your current mission and do a transition to more
local efforts with the resources that are available.
We will talk a little about workforce--do you have the
personnel that can make that a reality. We will talk about
financial risks that are involved and accountability, and the
conflicts between local providers and their sights and
ambitions and what the USAID goals are.
These are all areas that we hope that we will have some
conversation about during today's hearing.
The United States needs a strong Agency for International
Development to advance its interests in the 21st century. In
order to do this effectively, we need strong local partners.
Many of the most serious challenges the United States faces
in 2023 and beyond require us to effectively leverage our
development initiatives, and local actors play a critical role
in this effort preventing the rise of authoritarianism,
empowering businesses to build economic ties with our country,
addressing climate change, strengthening democratic
institutions, furthering peace building, and strengthening
health systems overseas to respond to global health crisis.
These are just a few of the development priorities in which
local civil societies have the local context and experience
required to help USAID achieve these goals. That is our
objective.
I must tell you we have a really distinguished two panels,
first from the Administration and then from the private sector,
and we welcome you here. You will get formal introductions in
one moment.
We welcome you to this discussion so that we can work
together to improve the effectiveness of our international
development efforts.
With that, let me recognize Senator Hagerty.
STATEMENT OF HON. BILL HAGERTY,
U.S. SENATOR FROM TENNESSEE
Senator Hagerty. Thank you, Chairman Cardin, and I,
likewise, appreciate the opportunity to partner with you on
this and looking forward to a productive Congress.
I certainly feel honored to have been able to work with you
in the last Congress to achieve the beginning that we have in
the State Department and I applaud you for taking us in this
direction with USAID.
I would also just like to acknowledge that USAID does
business in some very tough places and a lot of the, by
definition, the developing nations where USAID does business
often lack the infrastructure to have the accountability, the
transparency, that we would like to see.
I want to acknowledge that challenge up front and say that
I know that it is difficult, as we move forward, but that is
the challenge that we are embracing today to try to help make
that better.
The notion of localization is very appealing. It,
certainly, from a person with a business background, smacks of
greater efficiency, disintermediation of sort of brokers and
people that go between, and it suggests to me in the long-term
that we could certainly become a lot more efficient with the
expenditure of our USAID dollars.
I hope we have a chance to talk about some of the efforts
toward localization that have taken place. I applaud Ambassador
Power and her setting the goal of 25 percent localization over
this Administration.
I agree with the chairman that is a very aggressive goal. I
would take us back to the Obama administration, and at that
point the Obama administration put forward the USAID Forward
program and at that point the administrator, Rajiv Shah, sought
to localize 30 percent of mission funding and, obviously, that
did not happen. I just want to acknowledge this has been tried
and has not happened on a broad scale basis.
I would like to draw our attention to an area that I think
may be an example where this has worked, and as a business
person we always try to find a case-in-point where we can
observe best practices and see if we can standardize on those
and that would be in the Trump administration, an effort called
Journey to Self-Reliance--the Journey to Self-Reliance
Initiative--and in particular I think that initiative probably
saw greater results as countries got toward their goal of self-
reliance.
There was a particular program there in PEPFAR where they
made tremendous, tremendous progress and I hope we will have an
opportunity to go there.
With respect to Ambassador Power's goal of getting to 25
percent, I just want to come back and, again, put a reality
check. This is a report, and I will quote from it, the
Congressional Research Service reported in January of this
year--a very recent report--that--I will just use the exact
words--that, ``USAID has faced challenges in operationalizing
its localization work. These include potential increased
financial risk when working with local partners when compared
with U.S.-based entities, inconsistent definitions of local
entities leading to confusion among stakeholders,'' just as
Chairman Cardin said, ``and potential conflicts between
localization objectives and USAID development goals.''
I think that that is a clear-eyed acknowledgement of the
challenge that we have to look at and, again, it takes me back
from a business background.
Let us take a look at what has worked, and Dr. Deborah Birx
and Dr. Bill Steiger wrote a report that was published by the
George W. Bush Institute just last month, and I am going to use
a quote from that. ``Fewer than 15 percent of the prime
recipients of PEPFAR funds managed by AID were local partners
in 2016, but by 2021, USAID transitioned more than 63 percent
of its worldwide PEPFAR awards to these local implementers and
it is on track to hit 70 percent this year.''
I think if we talk about what the next steps might be, let
us take a hard look and understand what worked and what has not
worked in the past and see if we can learn from that.
In that spirit, I look forward to hearing from the
witnesses today from both panels and I am certain that we will
have a very productive conversation.
Mr. Chairman, back to you.
Senator Cardin. Thank you, Senator Hagerty.
Senator Ricketts, I want to, first of all, welcome you to
our subcommittee. We have already welcomed you to the full
committee, but welcome to the subcommittee.
Senator Coons, who chairs the relevant subcommittee in
Foreign Ops, has a lot of demands. Thank you very much for
being part of this subcommittee. I appreciate it very much.
Our first witness is Michele Sumilas, who was the assistant
to the administrator for the Bureau of Policy, Planning, and
Learning and is USAID's lead on implementing the localization
initiative. She served as executive director of Bread for the
World, an anti-hunger Christian advocacy organization.
She also brings to the table her government experience
serving as USAID chief of staff and deputy chief of staff
during the Obama administration and earlier service on the
staff of the House Subcommittee on State and Foreign
Operations.
I learned this morning that she has roots in Baltimore.
Welcome.
STATEMENT OF MICHELE SUMILAS, ASSISTANT TO THE ADMINISTRATOR,
BUREAU FOR POLICY, PLANNING, AND LEARNING, U.S. AGENCY FOR
INTERNATIONAL DEVELOPMENT, WASHINGTON, DC
Ms. Sumilas. Thank you, Chairman Cardin, Ranking Member
Hagerty, distinguished members of the Subcommittee.
USAID is grateful for the support of members of Congress on
advancing a more localized approach to achieve sustainability
and greater impact from our foreign assistance investments. I
appreciate the opportunity to appear today to share our work.
When she articulated her vision for USAID, Administrator
Samantha Power said, ``Never before have our fates been so
intertwined with those of people around the world. So,
accordingly, it is imperative that we work hand-in-hand with
local communities as we address both chronic and acute
development and humanitarian challenges to achieve progress
that outlives our investments.''
This not only furthers our localization agenda, but it also
strengthens the NGOs to be voices for democracy, anti-
corruption, and transparency in their own countries.
For USAID, localization refers to the actions and reforms
we take to put local actors at the center of our work.
Localization is a whole-of-agency effort to understand local
systems and our role within them, to address barriers to
pursuing equitable locally-led development, to reevaluate our
risk posture while continuing to safeguard taxpayer resources,
to incentivize staff to work more closely with local partners,
and to build greater support for localization among our key
stakeholders, collaborators, and partners.
We want to reiterate as well that we see a continued key
role for our existing partners, including international NGOs,
U.S. small businesses, contractors, multilateral institutions,
and the private sector.
Collectively, we are working to change the power dynamics
between donor organizations and those with whom we work. We
want to ensure a seat at the table for local actors, especially
those representing women, girls, historically marginalized
communities, and others.
Localization is fundamentally about putting local context,
aspirations, dynamics, organizations, and change agents at the
center of our programming.
It is about recognizing that development agencies such as
USAID do not direct or drive change. Rather, we support and
catalyze local change processes.
To do this, we want to shift more leadership and ownership,
decision making, evaluation, and implementation to local
communities who possess the capability, connectedness, and
credibility to propel change in their own communities. This is
part of what Administrator Power calls our commitment to
Progress Beyond Programs.
To institutionalize this agenda, Administrator Power
established two high-level targets. By 2025, a quarter of our
funding will go directly to local actors, and by 2030 at least
half of our programs will create space for local actors to
exercise leadership over priorities, activity design,
implementation, and defining and measuring results.
Next month, we will release our first localization progress
report that will include the 2022 data for direct local funding
and it will also articulate the definition and methodology for
the second target as well as for the first target.
We see the two targets as complementary. Whom we partner
with is a key measure of localization, but direct funding is
only part of the story.
More broadly, opportunities exist to advance local
ownership across all types of relationships with local actors,
whether they are direct recipients of funding, sub-partners on
a USAID award, participants in a USAID program, or members of
the communities where we work.
We need to track how we work to create those decision-
making opportunities. This new target has been informed by
consultations with USAID staff, partners, and local
organizations themselves.
On the issue of direct measurement, we acknowledge the
complexities of defining a local entity and have been working
with stakeholders to make this target as accurate as possible.
Our goal was to come up with as good a proxy as possible
while minimizing the reporting burden on staff and our local
partners by maximizing our automated systems.
Finally, as part of all these efforts on targets, missions
and operating units will set direct funding targets for future
years and we will share more about these targets soon.
I also want to flag that our target of 25 percent of
funding is a global target and so in some missions there will
be--70 percent of funding will go to local organizations and in
other missions, depending on where we are working, as you said,
Senator Hagerty, we may have 2 or 3 percent going to local
partners. It has to be based on the local context.
While we measure our progress towards increasing locally-
led development, we will remain focused on impact.
Increasing our impact through locally-led development is
the ultimate reason we are committed to this. Engaging with
local partners and communities will create deeper development
outcomes, safeguard our investments, and advance the
Sustainable Development Goals.
While the measurement development process has been ongoing
and has received lots of attention, we have also pressed
forward with other reforms.
We are pushing forward a whole-of-agency change management
process including reforms to business practices built on
lessons learned and ongoing engagement with current and
prospective partners, and this is what is different about this
effort from USAID Forward. We are looking at all of our systems
and making changes.
We have released a new updated Risk Appetite Statement and
implementation plan. We have updated our Agency Learning Agenda
to make sure we are assessing our progress and making changes
along the way. We have established a Localization Playbook,
which is an internal document for our staff, and, finally, we
have a new Local Capacity Strengthening Policy.
Last week, we released a new Acquisitions and Assistant
Strategy. The Strategy has three core focus areas. The first
focus is on our staff, the second commits to streamlining
cumbersome acquisitions and assistance processes, and the third
focuses on lowering barriers to engagement. We have been
seeking input on all of this from everyone.
Finally, I just want to flag that we are also reducing
hurdles to accessing USAID information and in November.
Senator Cardin. You can finish your comment.
Ms. Sumilas. We launched the workwithusaid.org website,
which provides additional information for local organizations,
which has been used by over 200,000 new users. We also just
added a sub opportunities portal to the website.
I just want to flag, and I hope I will have a chance to
talk about Centroamerica Local, our Africa Localization
Initiative, and some of the work being done in our country
missions.
Finally, we look forward to working with you and I want to
thank the Appropriations Subcommittee and all of Congress for
the additional resources provided to hire new staff. Many of
these staff will be making these changes that we are talking
about, and I look forward to talking about specific legislative
changes that we would seek in the new Congress.
Thank you so much, and I look forward to answering
questions.
[The prepared statement of Ms. Sumilas follows:]
Prepared Statement of Ms. Michele Sumilas
introduction
Chairman Cardin, Ranking Member Hagerty, distinguished members of
the Subcommittee, thank you for inviting me here today to testify about
the United States Agency for International Development (USAID)'s
efforts to promote locally led development. We are grateful for the
support we have received from you and other Members of Congress on the
need to advance a more localized approach to achieve sustainability of
our investments and greater development impact.
When she laid out her vision for our Agency, USAID Administrator
Samantha Power said, ``never before have our fates been so intertwined
with those of people around the world.'' Acknowledging this, it is
imperative that we work hand in hand with local communities as we
strive to address both chronic and acute development and humanitarian
challenges and achieve progress that outlives and outlasts our
investments in time-bound programs. The communities in which we work
have unique priorities, knowledge, lived experiences, and aspirations.
Through collaboration with USAID, this local expertise can shape the
investments of foreign assistance and greatly increase its impact.
Creating space for local actors to exercise leadership is a smarter,
more efficient use of development and humanitarian resources. In the
spirit of ``Progress Beyond Programs,'' working with and through local
actors and leaders creates impacts and sustains progress long beyond
the period of performance of a single award or program.
As we take steps to realize this, we are urged along by a wide
range of stakeholders. Members of Congress, our international and local
implementing partners, and community-based organizations in the
countries where we work have all expressed their support for enhancing
locally led approaches and working with us to create a more inclusive
vision of development and humanitarian assistance. We see a collective
imperative to recognize and change power dynamics--to ensure that we
utilize the expertise of local actors--including, notably, those who
represent and have the confidence of historically marginalized
communities and groups. Our work must continue to support these local
changemakers to drive progress in their own communities.
For USAID, localization refers to the actions and reforms we are
taking to put local actors at the center of our work to advance locally
led development and humanitarian relief. Localization is a whole-of-
Agency effort to understand local systems and our role within them;
take specific actions to make USAID more accessible to local actors;
address barriers to pursuing equitable locally led development;
reevaluate our risk posture while continuing to safeguard U.S. taxpayer
resources; provide incentives to staff to work more closely with local
partners; and build greater support for localization among our key
stakeholders, collaborators, and partners. We will also continue to
work hand in hand with existing implementing partners, private sector
actors, international NGOs, U.S. small businesses, multilateral
institutions, and philanthropic foundations to complement, promote, and
increase our locally led development efforts. We need to make sure we
are building on the unique resources, skills, and networks of all
actors in the development and humanitarian system, and do so in a way
that supports and creates the conditions for local actors to lead their
own progress.
I'm honored to represent USAID today and share some of the progress
that we've made toward more locally led development.
measurement and metrics
Administrator Power has set out two high-level targets for our
localization efforts. The first is that by FY 2025, a quarter of
USAID's funding will go directly to local actors. The second, which is
of equal importance--or maybe even higher importance--is that by 2030,
at least half of our programs will create space for local actors to
exercise leadership over priorities, activity design, implementation,
and defining and measuring results. In the next month, we will release
our first localization progress report that will also include our first
year of data for direct local funding as well as the definition and
methodology for a new metric for tracking local leadership. But today,
I'd like to preview how these measures relate to each other and why,
together, they are important for tracking our progress.
We see these two targets as complementary. On one hand, who we
partner with is a key measure of localization. And it is one USAID has
used in the past. But direct funding is only part of the story.
Channeling funding to local partners can be done in ways that create
more or less space for local actors' agency and decision making. And,
more broadly, there are opportunities to advance local ownership across
all types of relationships with local actors--whether they are direct
recipients of funding, sub-partners on a USAID award, participants in a
USAID program, or members of a community affected by USAID programming.
So, while control of resources is an important aspect of ownership, the
power to meaningfully influence key decisions about how development
happens for your own community is at the heart of locally led
development. On the other hand, we need to track how we work to create
those decision making opportunities. This new metric is informed by
consultations with USAID staff, partners, and local organizations
themselves.
On the issue of direct measurement, USAID acknowledges the complex
nature of measuring what is considered a `local' entity and has been
working with stakeholders to make this metric as accurate as possible.
We also recognize there are several ways to measure direct funding to
local organizations. Our goal was to come up with as good a proxy as
possible, while minimizing the reporting burden on staff and local
partners by using automated systems to the maximum extent possible. At
the time of the launch, USAID was able to ascertain that our direct
local funding was 6 percent in FY 2021 (this has since been revised to
7 percent) and we will be using this data as our baseline. This year,
all USAID operating units were asked to review the 2022 data to ensure
its accuracy, resulting in many changes following the initial data
review.
We are also asking all Missions and operating units to set targets
and we will plan to share more about those in the coming months. We are
initially focused on establishing targets for the direct local funding
indicator, but we will also ask Missions and operating units to set
targets for local leadership after we pilot the new measure this fiscal
year.
While we measure our progress towards increasing locally led
development, we understand that we need to remain focused on impact.
Increasing the impact of our investments through locally led
development is the reason we are committed to this work. Taking the
opportunity to engage with local partners, communities, and leadership
will create deeper development outcomes and safeguard our investments.
While the measurement process has been underway, we have not been
waiting to move ahead on the goal of creating space for local
leadership in our work. Here in Washington, we have been making
fundamental changes to our business model and investing efforts across
the Agency to ensure we reach our localization goals and
institutionalize the business practices that facilitate successful
investment in local organizations. Our missions are also moving
forward. For example, USAID/Nepal has already committed to co-create
100 percent of its programs with local actors, at every step of the
way, from the concept stage to measuring and evaluating results. Early
support from Congress has made this possible and we want to recognize
and thank you for your partnership and assistance in support of this
goal.
Additionally, please note that our efforts to expand engagement
with local partners will in no way jeopardize our strong commitment to
close oversight and monitoring. We remain fully committed to
safeguarding U.S. foreign assistance, promoting effectiveness,
efficiency, and accountability, and preventing fraud, waste, and
misconduct.
internal reforms to support our localization goals
Achieving our localization goals requires a whole-of-Agency change
management process, including reforms to our business practices. These
reforms are built on lessons learned from our previous efforts to
expand engagement with local partners, as well as ongoing engagement
with both current and prospective international and local partners to
understand their needs and perspectives.
A central strategy that is driving our reform process is our newly-
released Acquisition and Assistance Strategy, or ``A&A Strategy.'' The
strategy's overarching goal is to ensure our A&A practices enable
sustainable, inclusive, and locally led development, and it has three
categories of commitments in pursuit of that goal.
First, the strategy focuses on our staff. Through efforts to
improve hiring, training, and retention, we will enable, equip, and
empower USAID's A&A workforce to engage with local organizations who
are unfamiliar with U.S. Government and USAID requirements and often
need more accompaniment through the process. Special attention is given
to hiring and retention approaches for foreign service national (FSN)
A&A staff who, with their in-country connections, continuity at post,
language capabilities, and professional skills, will be central to
advancing localization.
Second, recognizing that our award process can be cumbersome, the
A&A strategy commits to streamline our A&A processes and automate
repetitive tasks so USAID staff and partners can spend less time on
paperwork and more time on developing partnerships and delivering
development results.
And third, the A&A Strategy focuses on lowering barriers to
engagement with USAID for all partners, but with particular attention
to local organizations. The strategy highlights efforts such as using
more proactive communications to reach local partners; using more
flexible, adaptable, and simple award mechanisms; expanding the use of
less-than-full proposals up front and phased competitions; expanding
opportunities for local partners to engage in A&A processes in
languages other than English; making it easier for Missions to limit
competition to local partners; and exploring more ways to help local
partners recover their indirect costs.
We are already making progress. For example, USAID missions in
Northern Central America have ramped up their efforts to reach out to
potential new local partners, including through targeted outreach in
English, Spanish, and local Indigenous languages. And several Missions
are supporting a pilot for ``last mile translation,'' wherein final
applications are translated into English (a regulatory requirement)
from local actors who operate primarily in languages other than
English.
We released the A&A Strategy earlier this week along with a draft
implementation plan. We are seeking input from internal staff and all
our partners to shape and inform our efforts. We hope to tap into local
organizations' expertise on how to implement the objectives in the A&A
Strategy, asking for their input to identify the barriers local
organizations face in partnering with us, beyond those we are already
addressing.
One topic on which we anticipate significant input and discussion
to find a solution is the requirement to obtain a unique entity
identifier (UEI) and register in the System for Award Management (SAM),
which is a U.S. Government-wide system designed for U.S. entities.
USAID staff and local organizations consistently highlight challenges
with the UEI/SAM process. For example, there is a requirement that
documentation in the entity validation process be submitted in English;
this is a huge barrier for many local entities whose operations--and
documentation--are in other languages.
In addition to reducing the procedural requirements to access USAID
funding, we're also reducing the knowledge barriers that have
historically impeded local organizations from working with USAID. In
November 2021, we launched the WorkwithUSAID.org website to help
development organizations expand their knowledge and networks. Since
its launch, over 200,000 new users have visited the website and more
than 3,700 entities from more than 90 partner countries have registered
in the Partner Directory. Of these entities, more than 60 percent self-
identified as ``local.'' The platform also includes resources in nine
different languages.
The newest feature on the platform centers around a popular topic
in the development community: sub partnership opportunities. A Sub-
Opportunities Portal has been added to the website, which shares
opportunities being offered by USAID's prime implementing partners, who
are seeking subcontractors or subawardees when they need specialized
expertise or on-the-ground support. For current USAID prime partners,
the new page will raise the visibility of their subaward and
subcontract opportunities, allowing them to access a wider pool of
qualified potential partners. And for these potential partners, the
page will provide visibility into more ways to get involved.
The team is working on additional enhancements to the website,
including a funding opportunities feed that will pull all ``live''
USAID-specific opportunities from SAM.gov and Grants.gov into one
place, making it easier for potential partners to locate solicitations.
Finally, we are working to translate the entire platform into multiple
languages, prioritizing Spanish, French, and Arabic.
regional initiatives
While all USAID Missions are exploring opportunities for expanding
their engagement with local partners and other local actors, regional
localization initiatives offer targeted and expedited opportunities to
expand engagement with local partners.
Launched just over a year ago, Centroamerica Local is a 5-year,
$300 million initiative to engage, strengthen, and support local
organizations in El Salvador, Guatemala, and Honduras to lead programs
to advance sustainable and equitable economic growth, improve
governance, fight corruption, protect human rights, improve citizen
security, and combat sexual and gender-based violence in line with the
U.S. Strategy for Addressing the Root Causes of Irregular Migration in
Central America. Under the program, USAID missions in the region are
expanding outreach to local organizations, including indigenous and
women-led organizations, using procurement flexibilities to make
partnership opportunities more accessible to local organizations. We
are now directly supporting more than 20 local partners in El Salvador,
Guatemala, and Honduras.
The Africa Localization Initiative is our second regional
initiative and will build on the consistent investment that region has
seen over the years, particularly in health and food security. The
initiative will be a targeted effort in which USAID Missions identify
opportunities and the support and flexibilities necessary to take
advantage of those opportunities. We are focused on understanding what
Missions need to expedite these efforts.
global leadership in locally led development
And finally, we recognize that USAID is a powerful player in
development and humanitarian spheres. We want to use our voice, power
of example, and partnerships to encourage others to also advance
locally led development. We are seeing new momentum around reimagining
the business of foreign assistance, and we want to help push that
forward.
To date, USAID is the only international development donor that has
made clear, measurable commitments for how it will hold itself to
account for making progress. But other countries are also invested in
making their work more locally led.
That is why USAID is working with other donors on shared
commitments and approaches for increasing locally led development. In
December, during the Global Partnership for Effective Development
Cooperation Summit in Geneva, I announced that the USAID and 14 other
bilateral donors agreed to a new joint statement on supporting locally
led development.
The joint statement outlines specific commitments on behalf of the
joining donor institutions to: (1) shift and share power with local
actors; (2) channel high quality funding as directly as possible to
local actors; and (3) use our voices to advocate for locally led
development.
Building on previous international commitments, this statement
provides a strong collective statement of donor commitments to
localizing development, humanitarian, and peacebuilding cooperation,
with a particularly important focus on power dynamics. Together, we
will work toward actualizing these commitments, and will continue to
advocate for other donors, philanthropies, and multilateral
organizations to join us in these efforts.
congressional flexibilities
We are grateful for the support and enthusiasm we've heard from our
partners and advocates in Congress for advancing a more localized
approach to development and humanitarian assistance.
We look forward to working with this committee to advance reforms
and tackle the constraints involved with scaling up localization,
including those related to current statute or regulation. In
particular, we are interested in pursuing changes to how U.S.-centric
requirements, such as SAM registration and compliance with certain
accounting and audit standards, are applied to partners overseas.
I'd like to thank the committee for the increased funding for 270
new direct hire staff and 33 Foreign Service National staff in the FY
2022 and FY 2023 appropriation funds. Through our multi-year Global
Development Partnership Initiative, we hope to continue to work with
Congress to grow the permanent Foreign Service workforce to 2,500, the
Civil Service workforce to 2,250, and hire 206 Operating Expenses-
funded Foreign Service Nationals.
Flexibilities are central to advancing locally led development, and
an example from a Local Works program in Burma illustrates why. In
Burma's Kachin State, USAID/Burma had been working with international
partners to address high HIV rates, which were driven, in part by a
complex, heroin epidemic. The Mission's earmarked funds, however, did
not allow for activities that addressed the complex socioeconomic
factors underpinning the drug epidemic. The Mission was able to use
Local Works' flexible funding to listen to local actors--including
faith-based and youth organizations, women's groups, the private
sector, and others--and then design programming with these
organizations based on how they defined the challenge and their
envisioned solutions--a strategic, sustainable approach to the complex
nexus of the HIV and drug epidemics.
We also hope that future legislation can support the New
Partnerships Initiative (NPI), which helps improve the Agency's ability
to partner with new, non-traditional, and local partners. To note one
example of NPI's success, I'll highlight USAID/Nigeria which bought
into multiple NPI mechanisms to channel hundreds of millions of dollars
through awards to new and local partners. Despite a challenging
security environment, the Mission currently has 16 awards to local
partners with a value of $538 million.
In addition, we hope that any new legislation will support our
efforts to apply a localization lens to all of our work, whether that's
by making USAID more accessible to local partners or by removing
barriers to help USAID and our traditional implementing partners work
in different ways with local organizations. USAID looks forward to
continued dialogue on the specifics of these reforms in the coming
months.
conclusion
Thank you again for the opportunity to speak with you today. USAID
hopes to continue collaborating closely with Congress to lift up a
diverse chorus of voices within and outside of the Agency to create a
more secure and prosperous world. I welcome your questions and comments
on USAID's leadership in driving locally led development.
Senator Cardin. Thank you very much for your testimony.
Today is the day that the President will be submitting his
budget, so it is appropriate, first, that we start on workforce
issues.
In the last Congress, as I mentioned earlier, Senator
Hagerty and I made a priority of issues within the State
Department.
Part of that was training, that we felt that we needed to
up our game on training. The challenge is that there were not
enough personnel to substitute as Foreign Service officers did
their training mission. It was a budgetary issue from the point
of view of the number of personnel.
USAID uses a lot of local contractors and grants and they
are very valuable to you accomplishing your mission. We
recognize that. I do not want to minimize any aspect of the
tools that you have available.
Do you have an adequate number of Foreign Service
Officers--the FSOs--to be able to transition to more being done
at the local level where you are going to need to deal with
financial responsibility and accomplishing missions, et cetera?
Do you have the personnel in order to implement a
transition to 25 percent localized?
Ms. Sumilas. Thank you so much for the question, and I will
say that we do not have enough staff and we are working on
increasing that. We thank the Committee and the Congress for
the additional resources for additional staff in the 2022 and
2023 bills, and you will see the 2024 budget request asks for
further staff.
Those staff will be focused primarily on contracts--
contracting officers in the field and we are working also to
work much more closely with our Foreign Service National staff
to provide opportunities for them to also serve as contracts
officers.
Currently, we have, I believe, somewhere around 20 or 30
contracts officers who are Foreign Service Nationals and we are
looking to significantly increase that number at the mission
level.
They have the context and the ability to ensure that we are
working most carefully with local partners. We appreciate the
support you are providing.
This is an iterative process and we are being very careful
about protecting taxpayer dollars, putting in place lots of
checks and balances to make sure that resources are going to
the right local partners in the right way with the right
oversight.
Senator Cardin. I want you to elaborate more on the
protections to the taxpayers. As we do more and more
localization, explain to me how you will be able to ensure that
we have the appropriate mechanisms in place for the proper use
of taxpayer dollars and that you have an accountability system
that this is the most effective way for us to achieve our
development goals.
Ms. Sumilas. Thank you very much for the question. This is
something that is very much on our minds.
One, I just want to be clear that the requirements for
local organizations will be no different from the requirements
for large NGOs that are U.S.-based or international NGOs.
Local partners will be required to meet our audit
requirements. They will be required to have a monitoring and
evaluation plan and we are setting up processes at the mission
level to make sure that this will all be in place.
We are also working on creating new support mechanisms both
for USAID mission staff, as well as organizations in the field
to help them build up their accounting systems, their HR
systems, and their monitoring and evaluation processes.
I think we would also flag that there is no evidence that
local organizations are any more corrupt or use resources in a
way that is not consistent with their award more than any other
partner that we have.
What is often the case is they do not have the same level
of information that our international partners and our U.S.-
based organizations have. There are instances where they may
take an action that seems like it is inconsistent with our
auditing practices, but it is a knowledge issue. It is
generally handled very carefully.
The other thing we are putting into place is new award
types. We are doing fixed amount awards, which are based on
progress towards goals in the grant or contract.
For example, if I am a small organization, I will have
milestones that I need to reach before resources are released
to me and I will have to provide receipts and accounting for
all the resources that I am using.
We are working very closely to put this all into place. I
would also just flag the new Acquisitions and Assistance
Strategy that was released this week.
We have an implementation plan to go along with that and we
are building systems in missions and in Washington to help
support these local organizations to meet our requirements.
Senator Cardin. I just want to underscore the point that
Senator Hagerty made about PEPFAR.
Many of us have been to countries that have been the
recipients of PEPFAR dollars and we see the local capacity to
deal with health challenges that was just not there before,
COVID-19 being one, how PEPFAR countries were able to do a much
more effective job because we built up the capacity through
PEPFAR that they are handling health care issues and the
sustainability.
I would hope that you could get--and you do not necessarily
have to answer at this moment, but if you could get back to our
committee other areas where capacity building could give us the
same type of results that we saw from PEPFAR, so we make the
investments in building up local capacity where we think we
will be able to see big dividends in the future with a country
being able to handle their needs rather than needing
international assistance. I think that would be very helpful to
us.
Ms. Sumilas. Thank you, Senator Cardin. We will get back to
you with more details on that.
One thing I would just flag. The reason PEPFAR was
successful is they really took a systems-based and whole-of-
initiative approach to doing this. From the very beginning,
working with local partners was a priority. That is why this
initiative is really focused on our systems and the ways we
work to make sure it can be successful.
Senator Cardin. Thank you.
Senator Hagerty.
Senator Hagerty. Thank you, Chairman Cardin.
I will come back to you, Assistant Sumilas. First, thank
you for being here today.
I would like to ask you a foundational question about
localization, and Senator Cardin touched on this in his opening
remarks, but it is how you define localization.
In your prepared testimony--I am just going to cite it--you
say localization is, ``the actions and reforms we are taking to
put local actors at the center of our work to advance locally-
led development in humanitarian relief.''
I think I understand that, but I want to contrast that with
how the Chinese Communist Party handles their diplomacy, how
the CCP handles their foreign assistance and their
infrastructure development overseas, and in that regard, it is
predatory. It is corrupt. They take advantage at every turn
they possibly can. It is coercive. It is often very big and it
is always marketed as ``made in China.''
In some parts of the world I feel like the CCP is
outcompeting us by the fact that they play by a different set
of rules. When I served as ambassador to Japan, I had to think
about all of our efforts through the lens of our strategic
competition with Communist China every single day and it
certainly shaped how I had our embassy work with JICO, which is
the Japan International Cooperation Agency, the Japan Bank for
International Cooperation--JBIC--which we worked with
constantly, how we worked with them on foreign development and
assistance projects in the Indo-Pacific region. I always had to
put that lens on it, how we are competing with China.
I would like to come back to you and ask you how USAID sees
its localization efforts fitting into President Biden's overall
National Security Strategy and, in particular, how localization
is going to support our strategic interest as we work in the
areas where you are deploying your resources.
Ms. Sumilas. Thank you, Senator Hagerty, for that question,
and I think we believe that the localization agenda fits very
squarely within the efforts to counter, compete, and cooperate,
if possible, with China.
USAID is very much a part of this agenda. We are the ground
game for the United States Government in terms of working with
our partners in-country.
We believe that working with local partners and really
creating a new relationship with civil society, with
governments, with the private sector, and other partners in the
country will demonstrate that we support a transparent, a
cooperative, and a collaborative way of doing assistance.
We hold countries and ourselves accountable for results. We
work closely and we listen to local voices. We lift those up
and make sure they are part of the conversation.
This is very much about working with our partners,
listening to them, having them see that we listen to them, and
that we are meeting their local needs and their aspirations.
Senator Hagerty. One aspect of the localization concept
that I think is inspiring in this regard is the fact that you
are going to get closer to the people that you are serving and
I would love to hear your thoughts on how you market the fact
that it is the U.S. that is delivering these resources and that
it is the U.S. that is partnered with this local organization.
How does the public see that in the nation where you are
actually working?
Ms. Sumilas. Thank you so much for that question.
USAID has over a 60-year history of working in countries,
and as you probably have seen on your trips and you will see,
going forward, we very much are committed to being clear with
our partners that this is assistance coming from the American
people.
It is demonstrated very clearly on our logo with the hands
that are clasped together, and we work within branding
guidelines. Where it is safe, where it makes sense, all of our
partners will be very clear that this is assistance coming from
the American people.
If we choose not to brand a project, it is for very
specific safety purposes and there is a waiver required, but
all assistance has that logo and an American bent to it.
Senator Hagerty. You mentioned branding requirements. It
sounds like you have guidelines put in place. Do you have any
reports on the effectiveness of our branding or anything of
that nature that would allow us to get a better sense for how
effective the branding process is?
Again, I am thinking about it contrasted to the way China
does it. I would be very interested to see, and you may want to
come back to me on that, but I would be very interested to
understand that better.
Ms. Sumilas. We will come back to you on that. We have very
definite data and information on that.
Senator Hagerty. Can I just get a little bit deeper into
it--some examples of how you are going about the process here?
One of the things that Administrator Power has said is that you
need to reduce bureaucratic burdens as a key part of being able
to localize with local partners.
Could you share some examples of the reforms that USAID has
enacted in terms of reducing bureaucratic burdens and those
type of burdens that would enable more localization?
Ms. Sumilas. Thank you for the question. This is very much
a part of our work. We are very focused on reducing
bureaucratic burdens, not just for local partners, but also for
all of our partners.
For example, we have made new requirements about how long
the initial application for a proposal needs to be. It is now,
I think, about a five-page document that local organizations
need to present to us and then we will have follow-on
conversations.
We are also making our work more available to all of our
local partners. Many of our requests for proposals are now
translated into local languages so local indigenous communities
and local partners can see them.
They are in Spanish, they are in French, they are in
Arabic, and we are doing that a lot as well on our new website,
workwithusaid.org, so people can have access to that.
In addition, we are doing new awards through co-creation.
We are sitting down with partners and saying here are the goals
that we want to reach in your country--maybe it is a health
goal, maybe it is an economic growth goal--and then working
with the local partners to say how would you do this; what
would make the most sense.
We are co-creating along the way and we are not asking
organizations to do a ton of work on a project that maybe is
not going to be appropriate to the context.
The last thing I would point to is our Acquisitions and
Assistance Strategy, which was just released this week. It has
a full implementation plan, which has a slew of new burden
reduction efforts in it, which we will be implementing over the
next year.
Senator Hagerty. We have exceeded the allocated time here,
but if I could just leave one more point in the context of
something you can get back to me with, and it may be part of
this acquisition strategy that you have just outlined.
If you could array where you see the low-hanging fruit in
terms of the highest benefit and work down. I would love to see
that chart and the impact that you think it would have.
I would appreciate that very much. Thank you.
Ms. Sumilas. We will definitely get back to you.
Senator Cardin. That would be very helpful, I think, for
our committee. Thank you.
Senator Coons.
Senator Coons. Thank you, Senator Cardin and Senator
Hagerty, for engaging in this important conversation.
As you well know in your former role of Bread for the
World, your previous role as chief of staff to the
administrator, and now your return role in Policy, Planning,
and Learning, this is a long-standing conversation about the
tension between using highly-skilled, broadly-experienced, but
U.S.-headquartered NGOs that have the audit and accounting
staff that understand the lingo and the process and the
procurement versus having local NGO partners that then build
the human resources, the administrative capacity, and are much
more likely to be delivering culturally appropriate and
effective solutions, particularly when the sorts of things we
are talking about are public health, which is an intensely
human personal engagement.
It is one thing when you are building a highway or a
stadium. It is another thing when you are encouraging people to
get vaccinated or talking about maternal and child health.
This is a discussion that has gone on over decades. As I
think my colleagues recognized and as you referenced, USAID
works in some very difficult places that are robustly corrupt,
where existing national and local government institutions are
uneven, where the human resources to effectively administer
programs in a way that is transparent and meets our
expectations in terms of the expenditure of public dollars is
challenging.
I am very encouraged by the progress you have made. I would
be interested if you would talk to just a few questions.
One is you mentioned in passing a new risk appetite
statement and I would welcome--having not seen or reviewed that
statement--I would welcome hearing what that new statement is,
what the risk appetite profile you think is, and what role we
in Congress play in sending signals because my concern--and I
will just reference embassy construction and security.
We had one tragic, terrible incident. There were more than
a dozen hearings about it, about Benghazi in Libya, and in the
years since I have seen us build fortresses remote from the
centers of cities that are really focused not on diplomacy,
development, and engagement, but on protection of Americans.
I understand that choice, but it was, in my view, one
incident and it has had significant consequences for how our
development professionals engage in countries.
Risk profiles are driven in no small part by what Congress
says and does in a few instances. My hope is that you will
accelerate your localization.
I just came back from a bipartisan trip to Zambia,
Botswana, South Africa, and, yes, the PEPFAR experience across
those countries led to significant strengthening of the NGO and
national health system capacity.
Talk to us for a minute about the risk appetite statement.
Tell me what, if any, additional legal authorities you think
you need and what sorts of signals, whether spoken, stated in
bipartisan letters, in resolutions or in legislation, would
help you move towards appropriately investing more in the
strengths and skills of the people who would ultimately
administer a localized program.
Ms. Sumilas. Thank you very much for the question and I
appreciate you grabbing onto that one piece.
The risk appetite statement is something that we actually
looked at very early in the Administration and realizing that
it had been built to really look at projects and programs of
several hundred million dollars.
We have updated our risk appetite statement and our staff
would be happy to update you on this. We have been doing
trainings with our staff around the world on this.
We are asking people to kind of look at the relative size
of a grant, look at the relative experience of the organization
you are working with, look at putting in ways of working
together where you really can watch the flow of resources so,
as I mentioned, the milestones option. We are asking people not
to put the same restrictions on grants and contracts of
$100,000 or $500,000 that they would put on a contract or grant
of $500 million, our risk appetite statement was written in
such a way that both were getting the same types of scrutiny
and oversight.
Now just to be really clear, USAID is very focused on
protecting taxpayer dollars. We do not intend to have this
localization agenda lead to the misuse of resources and
dollars. We are putting in place processes that will make that
clear to our partners.
In many cases, things that are seen potentially as
corruption are often just an oversight, not understanding how
to keep timesheets for staff for example.
There are just different cultural differences. We are
building systems and ways of supporting these organizations so
that they do not get caught in those kinds of situations.
In terms of legal authorities that we would ask that the
committee consider, some of them are related to this and some
of them are related to other things. For example, going back to
the question around resources and staff, in the appropriations
bill you have given us the authority to use up to 15 percent of
our program resources--for administrative and operating
expenses for Centroamerica Local.
We would ask that you would consider doing that in other
regions of the world because that will help us increase the
number of staff more quickly, help us hire more Foreign Service
National staff, which is a very big priority of the
administrator, who really know the local context, local
organizations, and can assess where the risk is.
We would also ask that you consider additional
flexibilities such as multiyear or no-year money. There is a
lot of work that we do that is really very focused on getting
money obligated and spent. We do want to spend our resources in
a very constructive way, but that often leads us not to work
with local partners who require more accompaniment as they
understand how to work and follow our rules.
In Centroamerica Local, you also have included legislative
language where you give us some flexibility in how quickly
those dollars need to be spent.
We thank this committee and others for continued support
for the New Partnerships Initiative and Local Works. These are
very important mechanisms that we have and we are looking at
lessons learned internally from those two specific initiatives
and applying them to our new way of doing business.
Finally, one additional thing that we are working on is
infusing localization across all sectors of work. This is not
just about doing localization on climate change or health or
education. It is across all of our work.
We want it to be the first way we work with partners in
countries and so we need flexibility on sectoral earmarks. In
some countries, in order to address their issues, countries
need resources to work on education versus water and we are
very restricted on this due to the sectoral earmarks.
I will stop here because I think I am probably over time,
but I do have an example--a country example--that might be
helpful in that context.
Senator Coons. Thank you, Michele. I would welcome hearing
that from you.
Mr. Chairman, I regret I have to go. You have some very
talented people behind you who I just wanted to give my best
regards to and I know you will get remarkable testimony from
Bill O'Keefe, among others, and so I look forward to staff
sharing the testimony that you will deliver today.
Great to see you. Thank you very much.
Senator Cardin. Senator Ricketts.
Senator Ricketts. Thank you very much, Mr. Chairman.
Ms. Sumilas, thank you very much for joining us here today.
I have some experience--a little bit of experience with
development in Nepal.
There is a foundation there called the dZi Foundation that
has been there a long time and they are, in my opinion, very
successful because they work with local partners. They are not
working with USAID.
Their model is that they go to a village. They ask what the
village wants, whether it is toilets, water, school, some--in
one case it was a grocery store, and they partner with the
village to ask them what they want and then require the village
to put in 50 percent of the sweat--put in the sweat equity,
essentially, to be able to build whatever they want and then
they provide the materials to be able to get it done.
In my opinion, it has been very successful. It is--one of
the things that they, for example, were able to do in one small
village that was about 5 days from the nearest road and about 2
days from the nearest airstrip by walking because that was the
only way to get there--there was not any roads or any other way
to get there, at least at the time and this was in 2008--they
were able to build a school for about $17,000.
I came back a few years later and USAID had built a
hospital there, my recollection--you got to take this with a
grain of salt because this is what I was told at the time and I
do not know how accurate it was, I never followed up with it,
so just taking a ballpark--of, like, $250,000 or $500,000.
To me, I was, like, how could you have possibly spent that
much money. Granted, it was a hospital, not a school so it was
a little different, but when we took the tour, it did not look
that different, right. This is very rural Nepal. Very remote in
Nepal. Hard to get to.
I think that the opportunity to be able to be more
effective and more efficient and use local partners is really a
good idea.
My question is more along the lines of, do you have a
model, like, what the dZi Foundation does where you can--rather
than parachute in and say, hey, I am going to give you blah,
blah, blah--a hospital--do you work with the local places where
you want to do development, ask them what they need, and then
require them to put in some of the sweat equity to some of
the--actually in some of the work so they have got a buy-in and
ownership?
I know one of the things the dZi Foundation did that was
very successful is, like, for example, when they build a school
they require the village to form a PTA to hold the teachers
accountable because generally the teachers come from Katmandu
and they were not keen on staying there.
They really worked with the local community to make sure
that the community could then run that operation afterwards and
be successful.
Can you just tell me a little bit about how you think about
this localization effort from a tactical getting it done,
working with the local community?
Ms. Sumilas. Thank you so much for the example and I love
that you actually have a country example because I think that
is really what makes this all come alive.
A couple of things I would say. One is that we do a lot of
work with local communities and we are trying to get our staff
to do more.
One is we are doing a lot of co-creation. If we know that
we are working on a water project in a particular part of a
country, we will reach out to local communities. We will talk
to local NGOs, local governments, the national government in
many cases, and ask what way of doing this work would work the
best.
I will say and going back to the conversation I just had
with Senator Coons, in some countries we are restricted on the
types of programs we can do because of the limitations on the
kind and flavor of money that we have. Be happy to speak to you
about that.
That does limit us. In some countries, we only have money
to do certain sectoral projects and no other projects.
Let me give you two examples, perhaps. In Kenya, we are
working with county governments and developing MOUs with their
25 counties--we currently have MOUs with 11 counties--to say
what are your priorities as a local government and how can we
help support that.
That effort is run and overseen by our Foreign Service
Nationals who are from those counties. In many cases, we are
trying to then take the money that we have depending on the
flavor of it and apply it most appropriately to those county
priorities, working also with local civil society.
We have a project in Honduras. It is called the Genesis
Global Development Alliance, which was co-created and is being
implemented by a local private sector foundation, very much
probably like your dZi Foundation. It is called FUNADEH, and in
that project we are working to increase opportunities for
vulnerable populations including youth and returned migrants to
provide economic growth opportunities, education, training, and
capacity strengthening.
Our support for that project has leveraged an additional
$14 million that the private foundation was able to raise on a
yearly basis, it will be reaching 75,000 children.
As I said earlier, the administrator has a new vision for
our work, Progress Beyond Programs, which is to say we have
program resources, but how can we leverage those resources
either from local foundations, local governments, other donors,
other foundations here in the United States, to really amplify
the impact that we can have. We are working very carefully to
do that.
Senator Ricketts. All right. Great.
Well, I will note I am over time. I just wanted to add one
little note as well. When the dZi Foundation, for example, was
building the school, one of the things they did is they posted
everything, getting back to your idea of transparency.
They posted on a board so all the villagers could see it,
how much sweat equity had been put in by whom in the village
and then how much money had been allocated to the village and
how it was being spent. It was not just given all the time--
given all at once, and the materials that were delivered and
that sort of thing.
Again, just I think there is maybe things to be learned
from some of these small nonprofits that are doing development
work in these countries because they have to be accountable for
their dollars as well when they are getting it from private
donors.
Anyway, just food for thought. Thank you.
Senator Cardin. Thank you, Senator. That was very helpful.
Senator Booker.
Senator Booker. Sir, were you going to pass me the power
and let me preside while you go down the hallway to another
meeting? I was hoping to have the power, sir.
[Laughter.]
Senator Booker. As a junior senator from New Jersey, I
rarely get such moments.
[Laughter.]
Senator Cardin. You are going to have to wait a little
longer, I am afraid.
Senator Booker. Story of my life in the United States
Senate. Wait.
Let me just, first off, by saying what an extraordinary
career you have had. You have dedicated your--you do things
that would make most Americans truly proud, but most Americans
have no idea the kind of impact you are making on the globe,
and I know you have a team of those kind of folks.
I just want to say--start off by saying how deeply grateful
I am for the work you do for humanity and in the name of the
United States. You make us a stronger nation.
I still remember when General Mattis was here and said that
famous quote, ``If you cut the State Department, I am going to
need you to buy me more bullets,'' and when you are doing
things in countries that stop the things that often cause
political instability, people do not realize that the dollars
we expend in the programs that you do, we get a big significant
return for that as well. Thank you for just being that kind of
patriot for our country.
I loved your testimony. You had a whole section at the very
end very gently trying to say to us where you need us to act. I
want to end with that, if I can foreshadow sort of on your--
what you call it. I think that your section was called the
congressional flexibilities. I want to end with that.
I want to talk about--and I was so interested in hearing
Senator Ricketts. I have a lot of my friends who do
philanthropy on the subcontinent of Africa, on the--excuse me,
on the sub-Saharan Africa and one of my friends who has led
major corporations of names we know who is really now
dedicating his life to that work is frustrated because he--they
de-Americanized their organization to stop the sort of
colonial, to really get local legitimacy.
They only have one or two Americans now involved in this
organization and he has frustrations that they have to go
through a subsidiary that takes a pretty high vig, which he
thinks is an obnoxious amount of money, just to get USAID
grants, so even less of it is going to the folks.
This idea of localization, I am just wondering in that
context of how do we--again, he has done all the research. He
has found some--an organization that gets the highest bang for
his philanthropic buck, but he is wondering why American
taxpayers are not able to get their money to get the highest
bang. They get it reduced by this amount of folks.
I am wondering what are the--what is the hope I could give
someone like that who is just wondering why USAID is basically
saying, we cannot give to you?
Ms. Sumilas. Thank you, Senator Booker, for that and I will
just say that Senator Cardin called out my Baltimore roots, but
I have also spent every summer in South Jersey, so I have deep
Jersey roots as well.
[Laughter.]
Senator Booker. You are reaching and I respect that.
[Laughter.]
Ms. Sumilas. I am just seeking a little grace here.
I think this initiative is what you should share with your
colleague. We are working to move significant amounts of money
to local organizations.
We are currently at about 6 or 7 percent. Later this month,
we will release the report and we will have new numbers, but
this is about finding the organizations like the one your
friend has been working with and saying, how can we work with
you better, what kinds of support can we give you on the back-
end in terms of accounting, auditing, human resources, etc., to
make you eligible for the resources that we have.
This effort is reaching as far as we can. As I said, the
workwithusaid.org website is a very strong resource. Over
200,000 new users have come on. Of those, many of them, I
think, over 60 percent are local organizations and it will have
lists of opportunities for people to apply for local grants. I
just want encourage them.
Also, we are working with our missions and our mission
leadership to urge them to get out of the fortresses that
Senator Coons was speaking about into local communities,
working with local people, and hearing about effective local
organizations.
This is the hope and we hope that people will apply, will
receive resources, and then this will be more sustainable
development.
Senator Booker. Great. One of my best friends of life is
actually a very conservative individual, gives lots of
contributions to my friends on the other side of the aisle, but
his philanthropy and one of the reasons I love him is he was
looking for the best ways to make a difference with his dollar
and he finds it is local health systems in Africa.
One of my heroes in America, a guy named Ron Finley, says
in South Central we have drive-bys and drive-throughs, and the
drive-throughs are killing more people than the drive-bys
because the number-one killer of our own population in the
United States are issues that deal with health.
The USAID's localization efforts are really focused on
strengthening health systems and helping the communities have
the resources and the ability to continue their global health
progress.
In particular, what is being done to support and equip
local health workers who are really the frontline of the
defense not only in stopping death at rates that are often
other issues, even wars, do not amount to, but also my concerns
are global pandemics, are local issues here in America, as well
as global issues that we see in developing countries?
Ms. Sumilas. I am going to bet that my colleague, Bill
Steiger, is going to give you lots of strong examples of how
the Global Health Bureau and PEPFAR are working very closely
with local partners.
What I would say is the Global Health Bureau is very
focused on local health workers. There will be an initiative, I
believe, in the proposed budget coming out later today from the
Administration that focuses on how can we strengthen local
health workers, how can we make sure they are paid, they are
resourced, they are trained to do what they have been asked to
do.
The Global Health Bureau has taken a specific interest in
the localization initiative. They are holding conferences,
trainings, discussions with their local partners and with their
local staff and U.S. Foreign Service Officers to talk about how
they can increase their percentages as PEPFAR has done. There
are common denominators across all that work and we look
forward to being part of that effort.
Senator Booker. In my time, I am trying to be more like
Senator Hagerty and less like Senator Coons--you guys can tell
them I said that--in going over my time.
At risk of now pushing the chairman, could you just end--if
you had two big wishes as we are doing this, just for the
record, just reemphasize maybe perhaps from your testimony,
what would be the two big wishes you have from us as we look
towards our legislative role?
Ms. Sumilas. These are not approved by OMB, but I will put
them out there----
[Laughter.]
Ms. Sumilas. --and you all can help me later.
First, I would say we would ask for the ability to use up
to 15 percent of program funds for administrative and operating
expenses so that we can further support the localization
effort. I think that is very, very important.
Then I think the additional flexibility on multiyear
funding so that we have additional time to work with local
partners who need the accompaniment to be able to apply, to be
able to implement, and to have the results that you all are
looking for.
Thank you for that opportunity.
Senator Booker. Thank you very much to my favorite Jersey
girl today.
[Laughter.]
Senator Cardin. You might want to consider spending a
little more time in Tennessee just as----
[Laughter.]
Senator Booker. That is wise counsel.
Senator Hagerty. One other thing I----
Senator Cardin. Senator Hagerty.
Senator Hagerty. Ambassador Power gave a speech at
Georgetown talking about the burden on your contracting
officers. In fact, she said that the average officer at USAID
has a burden of the dollars--she compared the dollars managed
by a contracting officer at USAID to a counterpart at DoD and
said about 4 the number of dollars managed at USAID
versus DoD, and I think she was using that as a way to
underscore the fact that there is a real shortage and a hiring
problem in terms of getting the competent people to do the
contracting work.
That is context. I am trying to get at something I have
seen happen in the corporate world. If you take the value chain
from the dollars that are being distributed from USAID and you
use the grants under contract construct, that is, you get an
American company as an intermediary, they do the work and then
they hire or subcontract a local firm.
If you think about the dollars flowing through there and
the process that happens, let us focus on that American
intermediary for a minute.
Do you have a sense for how many USAID alumni are employed
by these intermediary firms now?
Ms. Sumilas. I do not have a sense of that. I know that
there are alumni who work for many of those organizations, but
I would not want to offer a percentage at this time.
I would just say that this is an ecosystem of assistance.
We require U.S.-based organizations to help us achieve some of
our goals and other----
Senator Hagerty. No. No. I get that.
Here is what--here is my next question and you will
understand where I am trying to get.
Ms. Sumilas. Yes.
Senator Hagerty. If we knew the extent, I would like to
know it, but is there a big pay gap between what one can make
as a contracting officer at USAID versus what they could make
if they jumped over to the other side and became an
intermediary?
Ms. Sumilas. Again, I do not know the difference. I do not
want to offer a pay gap number because I do not know what it
is, to be honest with you.
Senator Hagerty. I would be interested in following up on
this at some other point, if you could think about it, but the
question I have got is whether the intermediaries siphon your
talent and make it almost impossible to ever fill the bucket,
so to speak, because there is this constant pull of
intermediaries who are extracting value in the chain and
playing--basically playing a lot of the role that the
contracting officer might otherwise play.
You have got overburdened contracting officers on the one
hand, this intermediary, and then you have got the localization
goal that we are trying to accomplish.
I am just trying to get at what that intermediary is doing
and how it is impacting your ability to deliver.
Ms. Sumilas. We would be happy to follow up with your staff
on that and to provide additional information.
Senator Hagerty. Okay. Thank you.
Senator Cardin. Senator Hagerty, you are raising a very
important point. I know that Senator Menendez, the chair of our
committee, and Senator Risch, the ranking member, have been
concerned about the relationship between DoD and State
Department as it relates to the responsibility--this has been
in foreign military arms sales.
It is also beyond that, and the capacity within the State
Department has been eroded. The capacity within DoD has been
strengthened.
It would be good, I think, for us to understand your
capacity on contracting and also the relationship between what
you are able to compensate versus the private sector. I think
that would be important information for our committee. If you
could get that to us, it would be helpful to us.
Ms. Sumilas. Happy to do that and appreciate the question.
Thank you.
Senator Cardin. Senator Booker, anything further?
Senator Booker. No, sir. For the respect of the time, I
think we should let this extraordinary public servant retire
from the hearing. Samantha will--Ambassador Power will kick my
butt if I am telling people----
[Laughter.]
Senator Cardin. Thank you very much for your testimony and
thank you very much for your service to our country. We
appreciate it.
Ms. Sumilas. Thank you.
Senator Cardin. We will now turn to our second panel. Let
me introduce them as they are coming forward.
We, first, have Bill Steiger, who is currently a global
health consultant at the George W. Bush Institute and recently
he was chief of staff at the U.S. Agency for International
Development--USAID.
Previously he was managing director of Pink Ribbon Red
Ribbon, a public-private partnership dedicated to the fight
against cervical and breast cancer in the developing world.
Dr. Steiger also served as director of the Office of Global
Health Affairs at the U.S. Department of Health and Human
Services and a special assistant for international affairs to
the Secretary of HHS. Thank you very much for being here.
Next, we have Elana Aquino, who is the U.S. executive
director of Peace Direct. With over 15 years of experience in
international development and peace building, she brings an on-
the-ground perspective of supporting locally-driven
initiatives, in particular on women's empowerment.
In Kenya, she served as head of the key coordination
secretariat between the Government of Kenya and 17
international development agencies. She is currently the chair
of the board of Women of Color Advancing Peace, Security, and
Conflict Transformation.
Our concluding witness will be Bill O'Keefe from Catholic
Relief Services, executive vice president for mission,
mobilization, and advocacy.
Mr. O'Keefe has also served as director of CRS' flagship
program, Operation Rice Bowl, director of church outreach for
CRS and director for government relations.
We will start with Mr. Steiger.
STATEMENT OF DR. BILL STEIGER, GLOBAL HEALTH CONSULTANT, GEORGE
W. BUSH INSTITUTE, WASHINGTON, DC
Dr. Steiger. Thank you, Mr. Chairman, Ranking Member
Hagerty, members of the subcommittee. I am grateful for the
invitation to discuss localization at the U.S. Agency for
International Development (USAID).
Diversification of USAID's partner base should be an urgent
priority, given the continuing concentration of the agency's
portfolio in a small number of hands, essentially, an oligopoly
of large U.S.-based and United Nations implementers.
When I started at USAID in 2017, just 25 implementers
managed 60 percent of the agency's funding for acquisition and
assistance and 75 organizations controlled 80 percent of
funding across all of the agency's portfolios.
Despite a series of policy changes and major pushes from
both Administrators Mark Green and Samantha Power, these
figures have continued to move in the wrong direction.
Transforming this model into one that prioritizes
relationships with entities based in the countries where USAID
operates should be a bipartisan policy goal. This was a major
focus of the Journey to Self-Reliance in the last
Administration.
On ethical, financial, foreign policy, development, and
public diplomacy grounds, it is imperative for the United
States to localize our foreign assistance.
Robust civil society, private sector, and faith-based
organizations do exist around the world today that are
delivering services and capacity-building right now and they
should be the agency's primary recipient of funds, going
forward.
Large U.S.-based partners will always have a place in
USAID's work, but the current situation is unhealthy. I endorse
and applaud Administrator Samantha Power's vision for
localization.
However, I believe the Administration should be even
bolder, more ambitious, faster to act, and more directive and
proscriptive, especially with USAID's overseas missions.
Fulfilling the Administrator's vision will not be possible
without continuing and expanding fundamental reforms to USAID's
business practices, cultural norms, and distribution of human
and financial resources, many of which began under
Administrator Green.
USAID already has the legal authorities and other tools
necessary to pursue a comprehensive localization agenda and
does not need congressional action with the possible exception
of the authority to create a working capital fund for
acquisition and assistance, which I am happy to discuss. Relief
from appropriations directives is another matter I would also
endorse.
The agency has remarkable legal and regulatory flexibility
to innovate in its procurement, but too often it chooses not
to. USAID's own staff, especially in the field, want to pursue
innovative approaches, but are often stymied by restrictions
and inertia in Washington.
The key to achieving localization is to unshackle the
agency's contracting and agreement officers to allow them to
innovate freely.
The President's Emergency Plan for AIDS Relief, PEPFAR, as
many of you have already mentioned, demonstrates that
localization at scale is not only possible, but transformative.
PEPFAR also shows us that getting locally-led development
to take root requires unflinching leadership, culture change,
clear measurement, and a willingness to take risks despite
opposition from entrenched interests.
My written testimony offers a number of specific
recommendations for how to bring that spirit to USAID,
recognizing that this process will not move at the same pace in
every country.
However, focusing on the Administrator's goal of putting 25
percent of USAID's current portfolio in local hands must not
detract from the pressing need for the agency to change its
business model, practices, and culture regarding the other 75
percent of its awards.
Now is a perfect opportunity to instill a culture of
greater programmatic risk-taking across the agency to attract
new ideas, new partners, and pay for results, including through
greater partnerships with the private sector.
The agency must use procurement instruments across its
entire portfolio that are flexible, nimble, and lessen the
burdens for both its own staff and implementers. In particular,
Category Management is squeezing out innovation at USAID right
now.
A radical approach to the transparency of procurement data
is needed also to allow us to understand whether our tax
dollars, localized or not, are having the impact we expect.
The bottom line is that the localization of our foreign
assistance benefits both the population USAID serves and the
U.S. taxpayer. Local organizations are closer to the issues and
understand local needs and priorities.
They have earned legitimacy and trust in their communities.
They build lasting capacity, self-reliance, and sustainability.
In an era of great power competition, our assistance to local
groups is more likely to be visible and known to beneficiaries
and the public on the ground. Local organizations are cheaper.
Finally, I should emphasize that increased staffing is only
one--and not even the principal--barrier to success in
localization.
Just adding more Contracting and Agreement Officers at
USAID without changing policy, risk tolerance, lines of
authority, incentives, and senior personnel in key places will
not lead to the desired outcomes.
USAID must retain and make better use of the staff it
already has and continue Administrator Green's efforts to make
grant-making and contracting the responsibility of everyone at
USAID.
I believe the purpose of foreign assistance is to end its
need to exist, as Administrator Green said. This goal is hard
to achieve without localization.
I thank you for the opportunity and welcome your questions.
[The prepared statement of Dr. Steiger follows:]
Prepared Statement of Dr. Bill Steiger
``If they get you asking the wrong questions, they don't have
to worry about the answers.''--Thomas Pynchon, Gravity's
Rainbow
Chairman Cardin, Ranking Member Hagerty, and Members of the
Subcommittee, I am grateful for the invitation before you to discuss
what is variously known as ``localization'' or ``locally led
development'' at the U.S. Agency for International Development (USAID).
USAID's current system of grantmaking and contracting has created
an oligopoly of large, U.S.-based implementers that are expensive,
inefficient, and largely unaccountable for their performance.
Transforming that model into one that prioritizes relationships with
entities that are based in the countries where USAID operates should be
a bipartisan policy goal. Robust local civil-society, private-sector,
and faith-based organizations exist around the world today that are
delivering services and capacity-building right now--they should be the
Agency's primary recipients of funds going forward. Large numbers of
USAID's own staff, especially in the field, believe in localization and
wish to pursue it through innovative approaches but are stymied by
restrictions and inertia in Washington. The key to achieving
localization is to unshackle the Agency's Contracting and Agreement
Officers (COs/AOs) to allow them to innovate freely.
In the service of making localization at USAID more effective and
feasible, I offer five principal messages for you and your colleagues:
1. On ethical, financial, foreign-policy, development, and public-
diplomacy grounds, it is imperative for the United States to
localize our foreign assistance.
2. I endorse and applaud Administrator Samantha Power's vision for
localization; however, the Biden administration should be
bolder, more ambitious, faster to act, and more directive and
prescriptive (especially with USAID's overseas Missions).
3. USAID already has the legal authorities and other tools necessary
to pursue a comprehensive localization agenda and does not need
Congressional action (with two possible exceptions, including
the authority to create a Working Capital Fund for Acquisition
and Assistance). The challenges the Agency faces in localizing
its portfolio of awards are self-imposed, as USAID often
chooses not to exercise the authorities it enjoys.
4. Focusing on the Administrator's goal of putting 25 percent of
USAID's current portfolio in local hands must not detract from
the urgent need for the Agency to change its business model,
practices, and culture regarding the other 75 percent of its
awards.
5. Increased staffing is only one, and not the principal, barrier to
success in localization; simply adding more Contracting and
Agreement Officers (COs/AOs) at USAID without changing the
Agency's policy (and the interpretation of policy), risk
tolerance, lines of authority, incentives, and senior personnel
in key places will not lead to the desired outcomes.
what is ``localization'' or ``locally led development''?
These two terms encompass a multi-administration effort to award
more U.S. foreign aid to smaller, non-U.S. organizations and increase
the involvement of affected and beneficiary communities in the programs
funded by USAID and other elements of the U.S. Government. I appreciate
that the current Administration's approach to locally led development,
while clearly and appropriately focused on finding and funding more
local organizations around the world, is not just about the money. I am
heartened that public comments by USAID officials, including Assistant
to the Administrator for Policy, Planning, and Learning Michele
Sumilas, have given almost equal weight to the idea that USAID will be
consulting more with beneficiaries and communities in the design and
perhaps even procurement of its programs, recruiting them to
participate in the ongoing evaluation of the Agency's awards, and
inviting them to share in the accountability for them. Administrator
Power and Ms. Sumilas both correctly have mentioned that localization
depends on ``changing the culture'' at USAID. The Administrator's goal
of having 50 percent of all USAID's programmatic work, at least half of
every dollar the Agency spends, involve the input of local communities
in the lead in designing, implementing, adapting, or evaluating these
programs, might be far more important than the 25-percent goal.
Bringing this vision to reality will not be easy, and will face
stiff resistance both within USAID and among the development-industrial
complex that receives the vast share of the Agency's funding today.
Shifting the balance of power and resources away from U.S.-based
organizations will be impossible without the continuation and expansion
of fundamental reforms to USAID's business practices, cultural norms,
and distribution of human and financial resources.
why pursue localization?
What the Biden administration has proposed in its localization
agenda is consistent with, and builds upon, similar efforts launched
under the Obama and Trump administrations. Why have three successive
administrations decided to pursue a strategy of attempting to provide
more resources to local organizations and increase their involvement in
USAID's decision-making, implementation, and monitoring? The answer
covers several dimensions, from cost to legitimacy to sustainability:
Local organizations are closer to the issues, understand
local needs and priorities, and can more efficiently and
effectively address barriers to access;
Local institutions have the legitimacy to advocate for and
drive the policy, social, and cultural changes necessary to
address development challenges effectively;
Local groups, especially civil-society and faith-based
organizations (FBOs), have access to, and have earned the trust
of, their communities;
Local private-sector firms are drivers of economic growth
and employment in developing countries, and of two-way trade
with the United States; and
Local partners, including governments, can ensure the
sustainability of interventions, particularly by eventually
assuming control of the financing of U.S.-funded programs.
The bottom line is that localization of our foreign assistance
benefits both the populations USAID serves and the U.S. taxpayer.
Rigorous economic analysis confirms this thesis: A new study (https://
static1.squarespace.com/static/5b2110247c93271263b5073a/t/
6377d05b92d652286d6720e5/1668796508981/
Passing+the+Buck_Report.pdf) released in November 2022 by the Share
Trust and the Warande Advisory Centre suggests that local implementers
are 32 percent more cost-efficient than international ones, because
awards to the former do not include what the authors call ``inflated
international overhead and salary costs.'' In addition to hiring few
foreigners on expatriate compensation packages, local organizations
much more seldom receive large reimbursements from USAID for so-called
``indirect costs.''
Yet we do not have to rely on modeling to see the positive impact
of localization on U.S. foreign assistance, because we what economists
call a ``natural experiment'' in the form of the President's Emergency
Plan for AIDS Relief (PEPFAR). A paper (https://www.bushcenter.org/
publications/pepfar-and-communities) I co-authored with former U.S.
Global AIDS Coordinator Dr. Deborah Birx, published last month by the
George W. Bush Presidential Center, traces the history of PEPFAR's
remarkable record of prioritizing the funding of local organizations
and the engagement of affected communities over the last 20 years.
Local organizations, defined by a standard more precise than that used
by USAID, now directly receive and manage almost 70 percent of PEPFAR's
bilateral funding, and the program has seen no diminution in quality or
coverage as a result. In fact, the cost-savings and programmatic
efficiencies produced by localization are a main reason PEPFAR has been
able to expand the numbers of people it supports on life-saving anti-
retroviral treatment and reaches with prevention interventions despite
a flat budget (https://gwbushcenter.imgix.net/wp-content/uploads/
Pepfar-paper-3-2.pdf) over more than a decade. Furthermore, no U.S.
foreign-assistance program better embodies Administrator Power's vision
of involving the input of local communities in awards. Representatives
from host governments and civil society participate in PEPFAR's annual
planning meetings, and clients and other citizens perform the
community-led monitoring that ensures the generous investment of U.S.
taxpayers is reaching the people the program is supposed to serve and
generating the expected quantifiable results.
We all can agree that close oversight is paramount to maintaining
the integrity of USAID's programs, no matter who implements them, and
the Administration's push for ``localization'' cannot not bring with it
a watering down of the Agency's standards for financial management and
probity. But I reject the assertion, often whispered by large U.S.-
based implementers, that ``local'' means ``high-risk,'' and that more
money to smaller foreign entities means more funds diverted. This claim
is designed to intimidate, and to provide cover for current business
models that diminish the role of local partners by limiting their role
to overly restrictive sub-awards. There is a need for sub-awards to
local partners from the traditional prime recipients of USAID's awards.
But the proper role for such established U.S.-based grantees and
contractors is to sub-award the majority of funding to equip local
partners through technical oversight, compliance support-, and
capacity-strengthening. In these arrangements, the local partner, even
as a sub-awardee, should be leading in project implementation.
Traditional prime partners mainly should be facilitators that enable
maximum transparency to the public and USAID.
To its credit, USAID's leadership has pushed back forcefully on the
assumption that going local automatically brings higher risk. In a
hearing before the House Subcommittee on International Development,
International Organizations and Global Corporate Social Impact in March
of 2022, Ms. Sumilas said, ``Our commitment to funding local
organizations does not stand in conflict with our commitment to prevent
waste, fraud, and abuse.'' I am encouraged to hear that all USAID's
current requirements to vet partner for ties to terrorism will remain
in place, that ``local organizations/entities'' all will have to pass a
``responsibility determination assessment,'' and that the Agency will
be quick to put in place additional ``special conditions'' in grants
and cooperative agreements that might involve heightened risk. This is
all great news for the taxpayer.
how to drive localization at scale: seven sets of recommendations
PEPFAR shows that localization at scale is not only possible but
transformative. But PEPFAR also shows us that getting locally led
development to take root and flourish in a large program requires
unflinching leadership, culture change, clear measurement, and a
willingness to take risks and follow data despite bureaucratic inertia
and opposition from entrenched interests.
Administrator Power's vision for localization and the steps she and
her team have announced are necessary, but insufficient. I am gratified
that USAID's Missions across the world are reaching out proactively to
community leaders and beneficiaries to seek input at the early stages
of designing programs and mapping the landscape of local organizations
in their countries to identify those not currently funded by the Agency
that could be good candidates for upcoming competitions. Yet the
increased knowledge of this existing capacity is not yet translating
into a large increase in awards to new and local partners. In the
service of helping drive localization at USAID farther, faster, and
with a greater chance of long-term success, I offer the following
recommendations, including for how Congress can help:
Define ``Local'' More Precisely and Measure Localization More
Accurately
So much of the success and credibility of localization rides on the
definition of a ``local organization/local entity.'' This question is
the single most important policy decision for the Biden administration
as it continues to shape its localization initiative. A standard that
is too vague invites U.S.-based and international groups and for-profit
companies to ``game the system'' by claiming ``local'' status; a
standard that is too strict can exclude the legitimate, helpful role
that international partners can play in mentoring and preparing local
organizations to manage Federal funds and implement USAID-financed
projects successfully. USAID's current definition (https://
www.usaid.gov/sites/default/files/2023-01/303.pdf) of ``local
organization/local entity'' is less precise than the one PEPFAR
(https://gwbushcenter.imgix.net/wp-content/uploads/Pepfar-paper-5.pdf)
uses, in particular because it has a lower threshold for beneficial
ownership (``majority'' vs. 75 percent) and no criterion for percentage
of staff who must be local citizens or lawful permanent residents. In
addition, USAID's framework for measuring local funding only qualifies
implementers as local based on the alignment of three criteria:
registration in the U.S. Government's System for Award Management,
declared location of an organization's headquarters, and location of
implementation. This system can allow international groups to pose as
``local'' and skew the measurement of progress in pursuing
Administrator Power's target of channeling 25 percent of USAID's
funding to local partners
In a report (https://www.publishwhatyoufund.org/app/uploads/
dlm_uploads/2023/02/Metrics-Matter-Summary.pdf) published last week,
Publish What You Fund concluded that, as a result of this expansive
definition, USAID might be overstating its progress on localization by
a significant margin. In research that looked at 10 countries, the
analysis found that USAID actually channeled 5.7 percent of eligible
funds directly to local and national actors from 2019-2021, while
USAID's approach produced an estimate nearly double that number (11.1
percent). That translates into a $732 million difference over 3 years
for just this subset of countries.
Finally, USAID has said it will produce its calculations of funding
to local organizations by using data from the U.S. Government System
for Award Management (SAM) and the Agency's Global Acquisition and
Assistance System (GLAAS). While the public has access to some of these
data, they cannot view the full set of information required to carry
out this analysis. This limits the possibility of carrying out any
independent replication of USAID's data and results.
USAID also should disaggregate these data according to sector and
geography, so the public can see not just progress against the macro-
level 25-percent figure but how the Agency is performing country by
country and sector by sector. Otherwise, there is a real risk that the
data from a few countries will tilt the scales and lessen the burden on
other Missions that need to do more work to shift resources to local
organizations.
Perhaps more important than the 25-percent target is assuring
USAID's progress against Administrator Power's 50-percent target for
``local initiative'' and leadership in development assistance. The
Agency's Policy on Promoting the Rights of Indigenous Peoples (https://
www.usaid.gov/sites/default/files/2022-05/USAID-IndigenousPeoples-
Policy-mar-2020.pdf) offers a good roadmap for how Missions could
structure and manage consultations with many kinds of communities, as
does the Country Operational Plan Guidance for PEPFAR. Any increase in
site visits, focus groups, listening sessions, and community fora would
be an improvement over the typical way USAID designs its programs.
Therefore, USAID should:
A. Change Chapter 303.6 of the Agency's Automated Directives
System (ADS) to adopt PEPFAR's standards for beneficial
ownership and local staffing as part of the definition of
``local organization/local entity.''
B. Maintain the current definition of ``Locally Established
Partner (LEPs) in ADS 303.6,'' but track funding to LEPs and
their sub-recipients separately from funding to ``local
organizations/local entities.''
C. Ensure that the tracking of local funding includes all
dimensions of USAID's definition of ``local organization/local
entity,'' and apply this definition strictly when determining
eligibility for funding opportunities restricted to new and
local partners.
D. Publish and track the achievement by each Mission of
standardized targets for ``local leadership'' in 50 percent of
programming by 2030 based on models such as PEPFAR
consultations and community-led monitoring, as well as the
Agency's own Policy on Promoting the Rights of Indigenous
Peoples.
E. Make public the metrics and data systems the Agency is using to
track progress on localization:
a. USAID should make all its award data public, including, but
not limited to, the data in the SAM and GLAAS systems the
Agency is using to track progress towards localization, to
enable the public to replicate the Agency's claims.
b. USAID should disaggregate these data by sector and
geography.
Increase and Assure Progress Against the Global Target for Funding to
Local Organizations/Entities by Assigning a Specific Share to
Each USAID Bureau and Mission, and Create Corresponding Funding
Opportunities for New and Local Partners Now and Every Year
For USAID to achieve Administrator Power's target of having 25
percent of award funding in the hands of local organizations by 2025,
qualifying groups will have to start winning a lot more of the Agency's
open competitions right away, and/or the Agency will have to start
structuring many more competitions just for them. If USAID does not
change the rules of the game now, local organizations will not be able
to win awards at the Mission level at a high enough rate to come
anywhere near the Administrator's goal. I am gratified that
Administrator Power has continued the New Partnerships Initiative (NPI)
begun by former Administrator Mark Green, including by requiring all
USAID's Missions and Bureaus to produce NPI Action Plans. The time has
come to convert the vision of these plans into concrete contracts,
grants, and cooperative agreements in larger numbers. Because the
interlocking jigsaw puzzle of geographic (country- and region-specific)
and sectoral appropriations directives imposed by Congress make it
extremely difficult for USAID to aggregate large central pots of money
and eliminates unattributed funds at most Missions, the Agency should
write these Notices of Funding Opportunities (NOFOs) in as broad a
fashion as possible to cover every programmatic area and account. In
this way, eligible local applicants in education, health, climate-
adaptation, economic growth, and other areas could all apply to the
same open call for proposals, and Missions could combine resources
under various directives and attributions to fund the resultant awards.
Furthermore, PEPFAR demonstrates that USAID can and should be more
ambitious in its vision for localization. In reality, Administrator
Power's target of 25 percent is too low, especially in Asia, Latin
America and Eastern Europe, where local private-sector and civil-
society organizations are well-positioned to take over the work of the
U.S.-based for-profit contractors that dominate the Agency's portfolio
in these regions today. I applaud the approach USAID has taken to shift
more funding in Central America over the last 2 years, but the Agency
can do more. Missions in countries such as Brazil, Peru, Colombia, the
Eastern Caribbean, India, Indonesia, and the Balkans should be ready to
move to close to 100 percent localization by the end of this decade.
In addition, an aggregate target allows individual Missions to
escape responsibility and accountability. USAID already has a very
successful example of how to translate an Agency-wide goal into
realistic, achievable yearly shares for Bureaus and Missions with with
a progressive, multi-year time horizon to meet them--the Small Business
Goals (https://www.usaid.gov/about-us/organization/office-small-and-
disadvantaged-business-utilization/small-business-program/small-
business-goals) managed by the Office of Small and Disadvantaged
Business Utilization (OSDBU).
I acknowledge that not every potential ``local organization/local
entity'' is ready and able to handle Federal funding as a prime
implementer today. We should agree that the compliance requirements
that come with U.S. Government funds are heavy (I would argue too
heavy), even for the most sophisticated organization. Signing central
contracts for supporting ``local entities'' in their governance,
management, and compliance is a strategic answer to this problem,
because it offers an alternative business model for the U.S. for-
profits that inevitably will see their funding decrease as USAID
transitions to making more awards to foreign groups. NPI ``mentoring
awards'' that require recipients to subaward 50-75 percent of the Total
Estimated Amount while focusing on technical, compliance, and capacity-
building assistance are another strategic answer. However, if the
Agency does not write the awards correctly, with specific Key
Performance Indicators and timelines for achieving sustainability, the
arrangement could end up trapping local organizations in a dependent
relationship with American companies.
A crucial step in localization is funding partners that help local
partners handle compliance. This will help nurture indigenous
equivalents to (and eventual substitutes for) the large, U.S.-based,
catch-all contractors. USAID should start this process immediately in
Asia, Eastern Europe, and Latin America, where more than enough local
competent, honest accounting, human-resources, and management-
consulting firms exist to perform this work. The system of ``Local Fund
Agents'' the Global Fund to Fight AIDS, Tuberculosis, and Malaria has
created to provide oversight to its grants around the world could serve
as a model. After all, ``localization'' should mean that all aspects of
both programmatic and administrative implementation are in the hands of
local people, including accounting, human resources, monitoring, and
reporting.
Another answer is to create more awards that are pass-through
arrangements in which U.S.-based and local implementers apply jointly
for funding related to specific, time- or milestone-bound projects. The
U.S. partner can keep a modest sum to mentor and provide oversight of
the local partner, which receives the overwhelming majority of the
funding. The best current example of this model at USAID is the
American Schools and Hospitals Abroad Program (ASHA), which is a relic
of the Marshall Plan and predates the Agency by almost 20 years. ASHA
only receives an appropriation of $25 million per year, and the
management of its APS and awards only requires a few full-time
employees. One of ASHA's most important aspects is that the local
partner is not treated as subordinate to the U.S. partner. This dynamic
is critical to mitigate the risk that the U.S. organizations could use
such an arrangement to drive up their margins in the name of ``building
capacity,'' the hallmark of the worst awards in the current system.
As a result, USAID should:
A. Raise the Administrator's localization target to 50 percent of
the Agency's portfolio of acquisition and assistance by 2030.
B. Using the Small Business Goals as a model, assign a specific
annual target for localization to each Bureau and Mission,
which, in the aggregate, add up to USAID's global goal:
a. Track and publish progress against the targets for each
Bureau and Mission as OSDBU does for the small-business
program.
C. Issue a renewable global umbrella Annual Program Statement
(APS) from Washington restricted to ``local organizations/
entities,'' modeled on the original NPI APS:
a. Require every Mission to publish an Addendum to it each
year, translated into local language(s), that follows the
central rules and definitions.
b. Set minimum first-year and 5-year amounts that each Mission
would have to invest in its Addendum to the APS.
D. Require each Bureau and Mission to set up a multi-sectoral
pass-through partnership program, modeled on ASHA, to attract
new local partners that have established ties with U.S. peer
institutions.
E. Set in motion a process to move 90 percent of the funding
managed by USAID's bilateral and regional Missions in Asia,
Latin America, and Eastern Europe to local implementers by
2030.
F. Help more potential applicants among local entities prepare to
qualify for Federal funds through targeted technical assistance
and additional education, ideally delivered through a series of
quarterly ``how-to'' webinars and ``Industry Days'' in multiple
languages.
G. Pursue a comprehensive, region-by-region strategy to find and
fund local organizations that can provide services to their
peers in the areas of governance, administration, and
compliance.
Include Humanitarian Assistance in the Localization Strategy
Since the International Disaster Assistance (IDA) and Food for
Peace appropriations account for nearly 40 percent of the Agency's
annual budget, USAID must not exclude them from the localization
agenda. The Bureau for Humanitarian Assistance (BHA) has a long way to
go to open its opaque funding processes and culture to qualified
``local entities.'' I appreciate the incremental steps USAID has taken
to increase BHA's capacity in response to inquiries from Senator Jodi
Ernst (R-IA), but the Agency needs to do more to lessen the power of
the oligopoly of United Nations (UN) entities and international non-
governmental groups that dominate HA now.
As a result, the Agency should:
A. Allow BHA to use its existing authority to use even more IDA
funds to acquire additional capacity for tasks directly related
to procurement.
B. Mandate that BHA use these resources to perform more of its
specialized pre-award assessments (essentially a pre-
qualification process) on local organizations, especially
faith-based charities, to make them eligible for HA funds.
C. Delegate to BHA the authority to hire its own Personal Services
Contractors.
D. Expand the use of Government-to-Government Agreements with
national agencies responsible for preparing and responding to
disasters.
Include Acquisition Fully in the Localization Strategy
On paper, acquisition (contracts) is included in the
Administrator's global target for localization. In practice, however,
the Office of Acquisition and Assistance (OAA) in USAID's Bureau for
Management (M) is leading a systematic campaign to increase the share
of the Agency's portfolio managed by U.S.-based for-profit contractors,
including by assertively pushing Missions and Bureaus to make awards
from the pre-competed Federal Supply Schedule and Multiple Award
Schedule managed by the General Services Administration (GSA). U.S.
Government-wide targets set by the Office of Management and Budget
(OMB) for ``Category-Management'' should not be an excuse for de facto
exempting contracts from localization, as USAID's overseas business is
fundamentally different from the activities of other Federal
Departments that primarily purchase goods and services for their
domestic use. Furthermore, USAID should not exclude its largest central
contracts, such as the Next Generation (NextGen) Global Health Supply
Chain Suite of Programs, from the localization agenda. Sixty years of
USAID's investments in medical procurement, supply chains, and delivery
in developing countries have failed to produce much sustainable local
capacity on the ground. Logistics and healthcare are two of the most
mature sectors in all of Africa, Asia, Eastern Europe, and Latin
America--these sectors are the biggest low-hanging-fruit opportunities
to begin to shift resources locally.
As a consequence, USAID should:
A. Negotiate with OMB to exclude the Agency's portfolio of field-
implementation contracts from the denominator used to calculate
USAID's progress against the Federal Category-Management goals.
B. Ensure the forthcoming Requests for Proposals under the NextGen
program are accessible to local applicants, including by
awarding points in the scoring process for local organizations
and restricting eligibility for the contract for last-mile
delivery to local entities.
Use the Principles of Localization to Take Aggressive Steps to
Diversify USAID's Entire Portfolio
Diversification has to be an Agency-wide priority, given the
continuing concentration of the Agency's portfolio in a small number of
hands. When I started at USAID in 2017, just 25 implementers managed 60
percent of the Agency's funding for acquisition and assistance, and 75
organizations controlled 80 percent of funding across all the Agency's
portfolios. The members of this cartel, including the so-called ``non-
profits,'' have become increasingly dependent upon Federal funds over
the years, to such an extent that one can consider USAID awards to
large U.S. organizations a form of corporate welfare. This dependency
is partially the result of the Congressional decision in 1998 to repeal
a 1984 amendment to the Foreign Assistance Act of 1961 (FAA) that
established that a ``Private Voluntary Organization (PVO) is ineligible
for U.S. foreign-assistance funding unless it could demonstrate that it
obtained ``at least 20 percent of its total annual financial support
for its international activities from sources other than the United
States Government.'' For-profit contractors have never been subject to
such a requirement.
Despite a series of policy changes and major pushes from both
Administrators Mark Green and Samantha Power to increase the number of
new and local partners, these figures have continued to move in the
wrong direction. USAID has remarkable legal and regulatory flexibility
to innovate in its grant- and contract-making; too often, it chooses
not to. The Biden administration's localization agenda offers a perfect
opportunity to make sure a culture of greater programmatic risk-taking
takes hold across the Agency. The risk of USAID's current approach is
that the bureaucracy will wall it off and ignore it, as they did with
Administrator Raj Shah's previous effort that had a similar global
target.
To avoid this fate, USAID needs to institute a generalized shift to
attract new ideas, new partners, and pay for results, including through
greater financial partnerships with the private sector. The Agency must
use procurement instruments across its entire portfolio that are
flexible, nimble, and lower the burden of compliance for both the
Agency's staff and implementers. Large awards to U.S. organizations
should have sunset provisions built in from the beginning, so that
local organizations are ready and able to assume the role of prime
recipient after 5 or more years. Making open calls (such as the APS,
Broad Agency Announcements, and two-stage competitions for contracts)
the default model for all NOFOs would lower the administrative barriers
to applicants, which would make it far more likely that smaller and
local organizations could win awards over time. I applaud Congress's
recent decision to remove the cap on the number of Innovation Incentive
Awards (such as Grand Challenges and prize competitions) that USAID may
finance every year, which always bring in partners that have never
received funding from the Agency before. These awards are underused,
strictly pay-for-results mechanisms that cut red tape for both USAID
and recipients. USAID's Bureaus and Missions need to seize this
opportunity to make these kinds of competitions a standard practice in
every sector and geography, which will allow the Agency to get more
money out the door faster while also heightening accountability to the
American taxpayer.
In this regard, USAID should:
A. Make open calls for proposals and solicitations with
streamlined requirements that only ask for short Concept Notes
at the initial stage of application the default modality for
both acquisition and assistance across the Agency.
B. Structure every large assistance cooperative agreement to
include mandatory Transition Awards to local organizations/
local entities for the vast majority of the substantive work by
the end of the period of performance.
C. Structure every large programmatic contract to require the
holder to devolve a greater share of the funding year over year
to local sub-recipients, with mandatory provisions for the
transition of the vast majority of the substantive work by the
end of the period of performance.
D. Structure many more awards as Fixed-Amount Awards (FAAs),
Fixed-Price Contracts, and other pay-for-results modalities.
E. Use reimbursable grants and the Agency's Other Transaction
Authority much more widely to conclude unconventional
investment arrangements and partnerships with private-sector
entities.
F. Allow the Agency's COs to exercise the authority they have
under the Federal Acquisition Regulations (FAR) and the and
Uniform Guidance for Federal Awards (2 CFR 200) to:
a. use two-step competitions that streamline and expedite
acquisition and assistance;
b. encourage oral presentations and other local-friendly
techniques in proposals for new awards; and
c. promote adaptive management by employing the Changes Clause
of the FAR to manage existing contracts.
G. Require that every umbrella contract to a U.S.-based
organization use Grants under Contract (GUCs) to increase the
small-scale, nimble grants to local organizations.
H. Require each Bureau and Mission to issue at least one NOFO for
Innovation Incentive Awards each year for each sector for which
it receives funding.
I. Ask Congress to Restore Sub-Section g of Section 2151u of the
FAA to re-establish eligibility criteria for Private Voluntary
Organizations and include a similar provision to cover for-
profit contractors.
Adopt a Radical Approach to Transparency
I appreciate that USAID has begun to take steps to make the Agency
and its processes easier to understand for new and local partners, such
as opening the website WorkwithUSAID.org and publishing more NOFOs in
languages other than English. Yet USAID fails to report the very
information that would promote accountability and transparency in the
relationships between new, underutilized, and local partners and
USAID's traditional primes. A stunning and intimidating asymmetry of
information puts most prospective local implementers in a difficult
position. A lack of basic data in the public domain on USAID's
procurement also makes it difficult to track how implementers of any
kind actually spend their funds, and to hold the Agency and its large,
U.S. based implementer accountable for progress on localization. USAID
is even allowing many of its largest U.S.-based prime implementers to
skirt the few statutory requirements that do exist, which makes it
impossible to replicate and independently verify their and the Agency's
performance claims. As I noted above, I endorse Publish What You Fund's
call for USAID to make publicly available all its award-related data in
the SAMS and GLASS systems.
As a result, USAID should:
A. Resume public reporting on the use of New and Underutilized
Partners (NUPs) by USAID, which the Agency tracked and reported
publicly through the Office of Management and Budget (OMB) from
2018 to 2021--including data at both the prime and sub-award
level.
B. Require both for-profit and non-profit organizations to
disclose publicly the percent of work they promise in their
responses to NOFOs to sub-award to smaller firms, including
local organizations, and the percent they actually deliver
through sub-awards quarterly.
C. Publish the NICRA rates USAID negotiates with all for-profit
and non-profit implementers.
D. Allow searchable public access to all contracts, grants, and
cooperative agreements stored in the Agency's Secure Image and
Storage Tracking System (ASIST) and accompanying performance
reports.
E. Enforce the existing legal requirements that all USAID's prime
implementers disclose their sub-recipients in the Federal
Funding Accountability and Transparency Act Sub-Award Reporting
System (FSRS) on a timely basis, and work with GSA to make
these data publicly available.
F. Hire more local organizations, such as universities, Supreme
Audit Institutions, and watchdog groups, to conduct the ongoing
monitoring and required, formal evaluations of the Agency's
awards in the field.
Harvest Human Resources for Procurement More Wisely
USAID's traditional rationale for why it cannot pursue and sustain
localization is that the Agency is short-staffed. There is no question
that USAID lacks the number of warranted COs/AOs that would correspond
to the size of its award portfolio. But blaming the Agency's failure to
diversify its partner base on staffing shortages is the easy, and lazy,
answer. Does USAID need more AOs and COs? Yes. But just adding more of
them to the current system will not fix the excessive concentration of
USAID's portfolio in the hands of UN agencies and large U.S.-based
companies and organizations.
The reality is more complicated, and just increasing staffing
levels is not the answer. Under the current conditions and in the
current culture, even doubling the number of COs/AOs in the Foreign
Service and Civil Service will not solve a series of underlying
structural and cultural problems. We tried this strategy in the Trump
administration: Despite a hiring freeze (first U.S.-Government-wide,
then continued by the U.S. Department of State), former Administrator
Mark Green secured permission to hire enough COs/AOs to increase
USAID's cade of procurement officials by 45 percent. Because of
attrition driven by factors I will describe below, by the beginning of
Calendar Year 2021 the numbers of COs/AOs on staff had returned to the
level before the hiring surge.
The main staffing challenge at USAID is that the Agency does not
make optimum use of the personnel it has. USAID is an entity whose
purpose and mission is grant- and contract-making. Nevertheless, the
Agency likes to pretend that it is a think tank, or a non-governmental
organization, or a charity, or an academic institution, instead of what
it actually is--a procurement agency. Too much of the workforce is not
engaged, and not incentivized to be engaged, in the Agency's core
business. They are reluctant to participate in the less-than-glamorous
aspects of that work: writing draft solicitations, sitting on the
Technical Evaluation Committees (TECs) that review applications,
checking monitoring and performance reports, acting as Contracting
Officer's/Agreement Officer's Representatives (CORs/AORs) to help
structure and oversee awards in progress, none of which requires a
warrant.
To be fair, this reluctance often arises because USAID has chosen
to make all of these processes just as burdensome for its own staff as
they are for applicants. NOFOs are unnecessarily long and complicated,
TECs take too long and are woefully inefficient (often because NOFOs do
not include clear scoring criteria and the panels insist on reviewing
all applications, even ones that are not qualified), and the system of
pre-award approval is duplicative and overly cumbersome. For example,
instead of accepting as valid the due diligence of a local organization
performed by another major public or private donor has recently (within
3 years, say) that covers the same topics USAID does in its pre-award
evaluations, the Agency insists on undertaking its own review. In
addition, Agency staff understandably focus on their job descriptions
and performance plans, which rarely include any expectations that they
will participate in procurement or award-management.
Administrator Green identified and found solutions to address these
and other systemic problems. However, not all the solutions were fully
implemented, and many have been quietly rolled back since the end of
the Trump administration.
Administrator Power needs to continue Administrator Green's efforts
to make grant- and contract-making the responsibility of everyone at
USAID and set clear metrics to hold staff accountable for spending
their time on the Agency's most important job. In exchange, she should
task M/OAA, the Office of the General Counsel, and the Bureau of
Policy, Planning, and Learning to reinforce the streamlining of every
step in USAID's Program Cycle, including procurement processes and
eliminate other distractions and time-wasters that prevent people from
believing they have the bandwidth to prioritize USAID's core work. The
Agency needs to make the best use of the personnel it has, by
empowering as many of them as possible to qualify for appropriate
warrants, providing better training and career paths for AOs/COs and
AORs/CORs, and empowering Foreign Service Nationals as much as possible
to shoulder more responsibility. In addition, USAID should emulate the
best practices of other Federal grant- and contract-making agencies,
such as the National Institutes of Health within the U.S. Department of
Health and Human Services, which supplement their workforces with
outside reviewers and procurement specialists who can perform almost
every step in acquisition and assistance processes short of signing an
award. ADS Chapter 303 is very clear that staff from other Federal
Agencies and Departments and ``[r]eviewers from outside the U.S.
Government may serve on Selection Committees,'' as long as they are
free from any conflict of interest, which the Chapter defines in
detail, but USAID almost never chooses to use this provision to
alleviate its workload. Finally, the Administrator must install leaders
in M/OAA who will embrace, rather than resist, her agenda.
Any new hiring for localization must be judicious and targeted
exclusively to procurement and award-management. For example, a major
bottleneck that needs immediate resolution is that the Office of the
General Counsel (OGC) only has a handful of lawyers who work on grant-
and contract-making full-time. I understand why Congress has been
reluctant to increase the Agency's appropriation for Operating Expenses
(OE, which I would argue is disproportionately small compared to its
Program Budget). But there is a simple way for Congress to make more
dollars available to USAID for hiring dedicated to grant- and contract-
making: Authorize a Working Capital Fund for Acquisition and
Assistance. Such an authorization would allow USAID to convert a
certain percentage of its Program funds to OE, but only for the purpose
of hiring term-limited staff and paying for supplemental resources
(such as contracts) to work exclusively on procurement.
Therefore, USAID should:
A. Build metrics on participation in processes related to
acquisition and assistance into the performance plans of all
non-administrative staff from all hiring categories:
a. In particular, all such staff should serve on at least three
TECs per Calendar Year.
B. Create a better-defined career path for both COs/AOs in both
the Foreign Service and Civil Service, including through
specific training to prepare them to compete better for
positions as Office Directors, Deputy Mission Directors,
Mission Directors, and Deputy Assistant Administrators.
C. Free COs/AOs in the field to pursue innovative instruments in
both acquisition and assistance, and increase the ceilings on
their warrants.
D. Require that every TEC include reviewers from outside USAID who
can demonstrate they do not have a conflict of interest:
a. At the Mission level, this should include local citizens,
which could be a primary metric for measuring ``local input.''
E. Prioritize the hiring of additional attorneys in OGC dedicated
to acquisition and assistance:
a. The cadre should have a mix of Federal procurement and
private-sector transactional experience.
F. Make pre-award assessments faster and more efficient, including
by pursuing mutual recognition and pre-qualification
arrangements with other major donors.
G. Revitalize and expand plans established under Administrator
Green to create a dedicated institutional home, strengthened
accountability, training materials, library, and other
resources for CORs/AORs.
H. Undertake an exercise to reinforce Administrator Green's
reforms and streamline the steps in all procurement processes
even further.
I. Accelerate plans to grant as many appropriately tiered warrants
as possible to staff from all hiring categories, both in
Washington and at USAID's Missions.
J. Restore Foreign Service leadership to M/OAA.
a. Consider splitting the positions of Director of M/OAA and
Senior Procurement Executive and restore both of them as
billets in USAID's Senior Foreign Service on the next Major
Listing.
K. Replace the entire leadership of M/OAA, including the Agency's
Competition Advocate.
L. Ask Congress to authorize a Working Capital Fund, with specific
guardrails on its use.
Senator Booker [presiding]. That is incredibly valuable
testimony. You did not seem at all nervous sitting before me.
It was Hammer time now, sir, and your poise was incredible.
Ms. Aquino.
STATEMENT OF ELANA AQUINO, U.S. EXECUTIVE DIRECTOR,
PEACE DIRECT. WASHINGTON, DC
Ms. Aquino. Thank you and good morning. Chairman Cardin,
Ranking Member Hagerty----
Senator Booker. Excuse me, it is Chairman.
Ms. Aquino. Sorry. I am so sorry.
[Laughter.]
Senator Booker. Yes.
Ms. Aquino. Chairman Booker.
Senator Booker. Thank you very much.
[Laughter.]
Ms. Aquino. Ranking Member Hagerty and other distinguished
members of the subcommittee, thank you for inviting me to speak
with you today about USAID's commitment to localization.
My name is Elana Aquino and I work with Peace Direct, an
international peace building organization. At Peace Direct we
take a different approach. We do not maintain country offices.
Instead, we find and support courageous local people dedicated
to stopping violent conflict and building lasting peace in
their communities.
We accompany, support, learn from, and partner with
organizations across Africa, the Middle East, Asia, and South
America. Our work to shift attitudes and practices among
policymakers and donors has moved us beyond the field of peace
building.
We are keenly aware that the entire international
development, humanitarian, and peace building system needs to
reform if it is to deliver better outcomes for the poorest,
most marginalized and conflict-affected communities worldwide.
Local leadership is key.
We welcome Administrator Power's commitment to respect the
dignity of the individual and localize USAID's efforts
globally. We also recognize this committee's important role in
ensuring this shift is meaningfully implemented.
Before discussing the challenges, opportunities, and next
steps, it is important to be explicit about who should be
considered local. Peace Direct disagrees with the definition
put forth in the ADS 303 directive.
In our view, this directive offers a loophole for
international organizations to qualify as local when they in
fact are not.
Early last year we worked with other prominent INGOs to
develop a set of definitions which differentiate international
from local organizations. I have included this set of
definitions in my written testimonial.
By not addressing this, we risk skewing and distorting how
USAID measures its success in this endeavor. Civil society
organizations worldwide have high hopes that USAID will make
good on its commitments. Those hopes will not be fulfilled if
funding is channeled to INGO subsidiaries or country offices.
According to a recent report by research organized by
Publish What You Fund, only 5.7 percent of USAID funding goes
directly to local organizations. This is woefully inadequate.
Local civil society organizations are often the first
responders to any situation and local community leaders are the
ones who remain when international organizations inevitably
move on.
USAID colleagues in various country contexts have shared
with me that they are proud of specific efforts that have been
made--that they have been involved in to provide aid locally
and directly to local actors, but they have also shared that
these tend to be the exception rather than the rule.
Though there are some challenges we must address, out of
respect for time I am only going to highlight a couple. A more
comprehensive list can be found in my written testimony.
First, flexible funding. Here we mean the idea that funding
for local actors be what we call local first funding--flexible,
inclusive, respectful, trustable--sorry, sustainable and trust
based.
In fragile contexts, dynamics can change daily if not
hourly. Adaptive funding models ensure local organizations
remain nimble and have a sustained positive impact in the
communities they are serving.
Finally, racism. By this we mean the deliberate or
unconscious exclusion from resources and opportunities due to
race. Through many global consultations with local actors, we
at Peace Direct believe that we must address systemic racism
throughout international development, humanitarian, and peace
building efforts.
Racism creeps in in numerous ways big and small, for
example, in the assumption that local civil society
organizations do not have the capacity to develop responsive
programs, therefore, justifying the reliance on international
organizations with country offices.
On opportunities, there are many opportunities to further
locally-led development. Again, with respect to time, a more
extensive list can be found in my written testimony.
First and foremost, it is recognizing that it is possible.
Peace Direct has employed a locally-led approach to peace
building since its inception in 2002. Taking a locally-led
approach demonstrates a profound commitment to the autonomy and
dignity of ordinary people to be agents of their own destiny.
Finally, there is significant momentum worldwide to
transform the international development, humanitarian, and
peace building system's efforts to be locally led. The United
States has a unique opportunity to lead and shape the future of
international development in ways that for the first time would
answer the call of the world's marginalized communities.
Nothing about us without us.
Lastly, on next steps, we must work together to address the
challenges outlined here and by others to ensure that we
meaningfully employ a locally-led model. This requires having
difficult conversations on dismantling systemic racism.
It also requires willingness to take smart risk and it
requires increased investment and budget for USAID to ensure
the agency has the capacity it needs to meaningfully implement
this model.
I want to take the time to thank you, Chairman Booker, and
Ranking Member Hagerty and the other distinguished members of
the subcommittee for organizing this vital hearing.
I look forward to responding to any questions you may have
and I am also open to working with you in partnership to
actualize and implement a locally-led model.
[The prepared statement of Ms. Aquino follows:]
Prepared Statement of Ms. Elana Aquino
Good morning, Chairman Cardin, Ranking Member Hagerty, and
distinguished members of the Subcommittee. Thank you for inviting me to
speak with you today about USAID's localization process. This is an
issue that directly affects the work of my organization, our partners
and local and community-based civil society globally.
My name is Elana Aquino and I work with an international
peacebuilding organization called Peace Direct. At Peace Direct, we
take a different approach than most international nongovernmental
organizations. We do not maintain country offices. Instead, we find and
support courageous local people and organizations who are dedicating
their lives to stopping violent conflict and building lasting peace in
their communities. We partner with, accompany, support, and learn from
partners across Africa, the Middle East, Asia, and South America. From
Afghanistan to Sudan, Colombia to Syria, it is our experience that
lasting development, peacebuilding and humanitarian support is more
effective and sustainable when led by local civil society organizations
embedded in the communities they serve.
Amplifying the experiences and perspectives of local communities
striving to overcome violence, we advocate within the United Nations,
here in Washington, DC, with the European Union, and in London where we
our sister organization is based, for policy change and improved
foreign assistance to better support locally led peacebuilding. Our
work to shift attitudes and practices among policymakers and donors in
favor of locally led efforts has moved us well beyond the field of
peacebuilding, as we are keenly aware that the entire international
development, humanitarian and peacebuilding system needs reform, if it
is to deliver better outcomes for the poorest, most marginalized and
conflict affected communities worldwide. Local leadership is key.
defining local
We welcome Administrator Power's commitment to respect the dignity
of the individual and localize USAID's efforts globally. We also
recognize this Committee's important role in ensuring this shift is
meaningfully implemented.
Before discussing the challenges, opportunities and the next steps
we believe should be taken to further locally led development, I
believe it is important to be explicit about who should be considered
local.
As it stands, USAID uses the criteria outlined in the ADS 303
directive to define what constitutes a local organization. According to
this directive, a local organization is:
Legally organized under the country's laws;
The country is its principal place of business or
operations;
It is majority owned by individuals who are citizens or
lawful permanent residents of the country; and,
It is managed by a governing body, the majority of whom are
citizens or lawful permanent residents of the country.
ADS 303 directive also includes a separate definition for locally
established partners (LEPs). If country offices of U.S.-based or other
international organizations meet the following criteria, they can
qualify as an LEP:
Continuous operations in the country for at least 5 years;
Local staff comprise at least 50 percent of office
personnel;
A local office registered with the local authorities and
with a local bank account;
A portfolio of locally implemented programs; and,
Demonstrated links to the local community including a
majority of local citizens on any governing body or board and
evidence of local support or roots.
Peace Direct disagrees with the definition put forth in the ADS 303
directive. In our view, this directive offers a loophole for
international organizations to qualify as `local' when they are in fact
not. Early last year, we worked with other prominent INGOs, including
Catholic Relief Services, who is also here today, as well as Mercy
Corps, Care USA, Save the Children USA, and the Hunger Project, among a
few others, to develop a set of definitions which distinguishes
international and local organizations. I have included this set of
definitions in my written testimonial in the appendix. According to
this document, Locally Established Partners are not regarded as local
entities, for the simple reason that they tend to be country offices or
subsidiaries of INGOs who are accountable to an office outside of the
country of operation.
This is a critically important issue as the current inclusion of
``Locally Established Partner'' in the ADS 303 directive risks skewing
and distorting how USAID measures its success in delivering 25 percent
of funding directly to local organizations and 50 percent of
programming to be co-designed in partnership with local organizations.
Civil society organizations worldwide have high hopes that USAID will
make good on its commitments, as set out by Administrator Power. Those
hopes will not be fulfilled if funding is channeled to INGO
subsidiaries or country offices.
challenges
According to a recent report by the research organization, Publish
What You Fund, only 5.7 percent of USAID funding goes directly to local
organizations. The current aid model is not equitable or sustainable,
and there are questions as to whether it is effective. Local civil
society organizations are often the first responders to any situation
and, as COVID-19 and the U.S. withdrawal from Afghanistan have
demonstrated, local community leaders are the ones who remain when
international organizations inevitably move on.
The current system does not meaningfully include the perspectives
and expertise of local civil society organizations as its default way
of working. In discussing this with USAID colleagues at country level
in various contexts, many comment that they are proud of specific
efforts they have been involved in to provide aid directly to local
actors. But these tend to be the exceptions rather than the rule and
that tendering, procurement, and implementation continue to remain
elusive processes that exclude local leaders. This is due to the lack
of directives and training to U.S. staff at the local level on how to
truly deliver on locally led development, peacebuilding and
humanitarian support in ways that are respectful and sustainable, along
with a lack of wrap around services required to prepare local actors
for receiving aid.
While we welcome the commitments and sentiments made by
Administrator Power, I want to raise some challenges that we must
address to meaningfully implement locally led development initiatives.
First, accessibility. By accessibility I mean more inclusive access
for local organizations to engage with USAID. USAID has recently
launched WorkWithUSAID to help local civil society organizations learn
what the Agency does and how they can partner with the U.S. Government.
However, local civil society organizations must still compete with
international, U.S.-based organizations who have relationships with and
expertise on how USAID operates and awards. A combination of
simplifying proposal and reporting requirements along with providing
wrap around services to support ease in uptake can make partnering with
USAID more accessible for local organizations.
Moreover, the responses to the calls for proposals circulated by
USAID and the reporting requirements are often required to be submitted
in English. This does not consider that for many local actors globally,
English is not their first language, if they speak it at all. Allowing
applications submitted in local languages, and even orally in some
cases, acknowledges the difficulties local actors are already facing
without seeking to add more. Shifting some of that burden to USAID to
seek translation is a step towards true partnership and will create
space for new entrants at the local level to participate.
Second, equitable partnership. By this, I mean partnerships that
are a relationship between individuals and organizations based on trust
that takes actionable steps to support the needs, priorities, and
agendas of all parties equally. In our experience working with local
peacebuilders globally, many local actors have highlighted that current
practice of partnerships are prescriptive in nature. Foreign actors
come in with pre-defined solutions often without the consultation or
buy-in of the local organizations or communities we are trying to
support. This overlooks the active capacity, agency, expertise, and
social, political, and cultural know-how local organizations bring to
any context.
Putting local civil society organizations in the driver's seat does
not mean international organizations do not have an important role to
play. International actors have many roles they can play. For example,
as an interpreter an international organization can explain the complex
jargon used by USAID, and I would encourage the committee to look at
the recent paper produced by Peace Direct on the future role of INGOs
as intermediaries.
Third, power dynamics. By this I am primarily looking at the
decision-making authority of the design of program work, resources and
credibility. USAID's place as the world's largest donor for
international development, humanitarian support and peacebuilding
efforts comes with explicit and implicit power. When USAID makes an
announcement to offer humanitarian support or invest in development and
peacebuilding efforts, it comes with a global recognition that the
United States is actively involved to address issues.
To effectively and meaningfully implement a locally led approach,
we must add the element of humility to recognize that we cannot know or
understand the social, political and cultural variables at play as well
as local organizations embedded in the community. And to acknowledge
that, as much as we may want to help and have good intentions, aid
delivered without community planning and inclusion can be patronizing
and harmful. At Peace Direct, we do not consider ourselves to be the
expert of any of the contexts our partners are working and living in.
We look to them for insights and recommendations on what can be done
and said, and we mobilize as best as we can to support them in their
self-identified work.
Meaningfully working with, not through, local organizations will
open opportunities for genuine thought partnerships to be combined with
the resources USAID brings to the table, allowing credibility to flow
from the community.
Fourth, flexible funding. The idea that funding for local actors
should be flexible, inclusive, respectful, sustainable and trust based;
what we call Local FIRST funding. As I mentioned earlier under the
challenge of accessibility, the bureaucratic barriers that come with
partnering with USAID often employ very rigid restricted funding. As
many of us here know and recognize, in conflict zones and humanitarian
crises, the dynamics change daily if not hourly. Funding models need to
be adapted to allow local organizations to change programming and how
humanitarian support is delivered to have a better chance of
effectuating a positive impact in the community they are serving.
We must improve USAID's granting mechanism to allow for flexible
funding to be deployed globally. At Peace Direct, we do this through
our Local Action Fund model, and we believe it is scalable.
Finally, racism. By this, we are looking at the deliberate or
unconscious exclusion from resources and opportunities due to race.
Through many consultations with local actors globally, we at Peace
Direct believe that we must address the explicit and structural acts of
racism through international development, humanitarian and
peacebuilding efforts. For example, we often wrongly assume local civil
society organizations do not have the capacity or ability to implement
programs therefore, we rely on international organizations with country
offices to lead. Another example is the assumption that we cannot
partner with local organizations due to rampant corruption and
mismanagement of funds. Just as corruption does not see color, we
cannot assume that every local actor is corrupt.
Only by deconstructing and dismantling racist ideologies regarding
the superiority of Western approaches and working toward a
redistribution of power can we meaningfully implement locally led
approaches.
opportunities
There are many opportunities to further locally led initiatives.
First and foremost, it is possible. Peace Direct has employed a locally
led approach to peacebuilding since its inception in 2002. We are
constantly learning and improving our model, and it has been proven to
be successful. Taking a locally led approach across USAID will not only
deliver better outcomes for communities worldwide; it also demonstrates
a profound commitment to the agency and dignity of ordinary people to
be agents of their own destiny. This is a sentiment that speaks to the
very core of the American values of individual liberty and self-
determination. And it reminds us of Nobel Prizewinning Economist
Amartya Sen's definition of development as ``the freedom to live the
life that one has reason to value.''
Second, improving USAID's funding model to be more flexible.
Flexible funding for local actors is the key to unlocking creativity
and adaptability for communities living in such volatile and
unpredictable contexts. By providing greater flexibility in its
funding, USAID will be able to contribute more effectively to the
achievement of the Sustainable Development Goals by allowing
communities to adapt their plans as the context changes. At Peace
Direct, we have piloted such an approach for over 5 years now, and have
proved that such flexible funding can be transformative for local
actors. Our ``Local Action Fund'' (LAF) is an innovative and flexible
grant making mechanism which supports and targets locally led
initiatives operating at the grassroot or sub-regional level, i.e.,
below the field of vision of most international donors. Through such an
approach, development or peacebuilding funding directly reaches those
who most need it, and such an approach is scalable.
Third, locally led approaches are cost-effective. Recent evidence
by The Share Trust points to the fact that local organizations can
deliver programming that is 32 percent more cost efficient than
international intermediaries. A more cost-effective approach will help
to eliminate the need to pick and choose what conflict or humanitarian
crisis deserves more attention and resources. This can allow the U.S.
dollar to stretch further and reach more people globally.
Fourth, a locally led approach is more sustainable. Working with
local organizations will generate read: credibility from the
communities we are seeking to support. Community-owned programs and
initiatives are more likely to be sustainable after international
organizations and USAID decide to leave. Thus, preventing the feeling
that there must be a continuous U.S. presence everywhere all of the
time.
Fifth, there are existing networks of local civil society
organizations ready and willing to work with USAID. We at Peace Direct
have mapped many across the world. There are other networks such as
NEAR, CIVICUS, Movement for Community-led Development, and United
Network of Young Peacebuilders, to name a few, who have an extensive
network of local civil society organizations working on any number of
development, peacebuilding and human rights initiatives. Consider this
a joint endeavor and build links with those already committed to
working in this way.
Finally, there is significant momentum worldwide to transform the
international development, humanitarian and peacebuilding system's
efforts to be locally led. From the 2016 Grand Bargain Agreement at the
World Humanitarian Summit to the OECD-DAC commitments and the Donor
Principles on Locally Led Development co-led by USAID and Norway, the
United States has a unique opportunity to lead and shape the future of
international development in ways that--for the first time--would
answer the call of the world's poor that ``nothing about us, without
us.''
next steps
We must move from commitment to action. Together, we can champion
and support the efforts USAID is making internally and globally to
ensure the shift to locally led is one that is comprehensive.
We must work together to address the challenges outlined here and
by others to ensure that we meaningfully employ a locally led model to
development, humanitarian, and peacebuilding efforts. This involves
having the difficult conversations of dismantling systemic racism to
address biases and unequal power dynamics. It involves being smarter
and risk-tolerant. It involves investing and increasing the budget for
USAID to ensure that USAID has the capacity it needs to meaningfully
implement this model.
I want to again take the time to thank Chairman Cardin, Ranking
Member Hagerty and the other distinguished members of this subcommittee
for organizing this vital hearing. I look forward to responding to any
questions you may have. I am also open to working with you all in
meaningful partnership to actualize and implement a locally led model.
appendix
Senator Booker. Thank you for that excellent testimony.
Mr. O'Keefe.
STATEMENT OF BILL O'KEEFE, EXECUTIVE VICE PRESIDENT FOR
MISSION, MOBILIZATION AND ADVOCACY, CATHOLIC RELIEF SERVICES,
BALTIMORE, MD
Mr. O'Keefe. Thank you so much, Chairman Booker, and
Senator Cardin in absentia and Ranking Member Hagerty, members
of the subcommittee.
On behalf of Catholic Relief Services, the international
relief and development agency of the Catholic community in the
United States, I want to thank you for calling this hearing and
for your leadership in addressing global poverty and injustice.
Humanitarian and development assistance are at a
crossroads. In one direction, we can continue to do what we
have done for decades, underestimating and under-investing in
local organizations in favor of international organizations,
INGOs, and contractors. In the other direction, we can seize
momentum and advance more locally development and humanitarian
response.
Rooted in our values, Catholic Relief Services encourages
the U.S. Government and other bilateral and multilateral donors
to take the second path, which we believe will vastly improve
aid efficiency and effectiveness, lead to more sustainable
programs, provide a foundation for more resilient systems, and
weave a stronger web of civil society organizations providing
services alongside governments, holding those same governments
accountable and building stronger democracies.
USAID has led efforts to promote localization, but has yet
to make enough progress. Reports to Congress show that roughly
1 percent of USAID's humanitarian assistance and 7 percent of
all its assistance were obligated directly to local entities in
fiscal year 2021.
Shifting resources and power to local leaders requires
political, economic, social, and cultural changes across the
USAID system. We believe conditions are ripe for real change
now, though.
One, local actors are ready. Some argue that local
organizations lack capacity. We firmly reject this assertion.
While every country is different, every situation is different,
responsible capable local organizations are ready to take on
more leadership roles in many instances.
INGOs are ready. Faith-based groups like CRS, secular NGOs,
and coalitions like the Modernizing Foreign Assistance Network,
of which we are a part, are ready to support a vision of a more
locally-led future.
Donors are ready. Over the last several administrations,
and we have heard examples of this already on this panel, USAID
has committed that working more equitably with and through
local entities is the path forward to sustainable impact.
Congressional support, though, is required to seize these
opportunities and build momentum. We urge this subcommittee,
working with appropriators, to take several actions.
One, follow the money. When local actors access direct
funding, they can invest in their own capacity, expand their
programming, and enhance their influence with governments and
donors.
He who has the gold, rules. Congress should require the
Administration to report on funding to local entities through
the annual appropriations process as in the last 2 years.
In addition, so local institutions can lead in new ways,
Congress should ensure USAID invests in holistic capacity
strengthening.
Second, measure what matters. Creating a uniform and honest
definition of local entity coupled with annual tracking of
progress over time is critical.
The aid transparency group Publish What You Fund recently
released a report entitled ``Metrics Matter,'' showing that
different definitions of local produce dramatically different
calculations.
What we measure and how we measure it will be critical in
determining whether progress is real. Catholic Relief Services
agrees with the definition that Ms. Aquino gave a few minutes
ago and has worked with Peace Direct and other groups in
similar efforts to clarify what we consider to be local.
Congress must provide oversight and should also evaluate
State Department funding of truly local entities as well.
Breaking down silos--local partners often implement both
humanitarian and development responses, but efforts to advance
their leadership are siloed.
Congress should encourage USAID to harmonize localization
strategies within USAID and then with State and other donors
and across contexts and types of assistance. Operational
policies and practices must facilitate local participation.
Finally, digging into the details. USAID has developed
strong policies to advance locally-led development. Additional
time, money, and human capital will be necessary to properly
implement these policies and accurately report progress.
Partner with USAID in a bipartisan way to remove barriers
to entry for local groups such as unreasonable award sizes,
unwieldy and inflexible procurement mechanisms, and excessive
compliance requirements that large INGOs like CRS have spent
decades building capacity to manage. Do not let this moment
pass.
I want to close with a quick story. In Nigeria, CRS led a
USAID-funded $40 million project to improve services for
orphans and vulnerable children. The project strengthened the
capacity of 49 local partners from state government, local
civil society organizations, and community-based groups
improving their technical, administrative, and financial
management skills.
By projects end, 10 of those partners transitioned to prime
recipient status for direct donor funding. This effort allowed
hundreds of thousands of children in their communities to
receive quality services provided effectively and sustainably
via local institutions and local government. This is the second
path.
Thank you again for your time and I look forward to your
questions.
[The prepared statement of Mr. O'Keefe follows:]
Prepared Statement of Mr. Bill O'Keefe
Chairman Cardin, Ranking Member Hagerty: On behalf of Catholic
Relief Services (CRS), the international relief and development agency
of the Catholic community in the United States, I want to thank you for
calling this hearing to discuss locally led development and
humanitarian response. The future of international assistance must
include a shift to more direct funding of local entities and more
genuine empowerment of local organizations to make decisions as they
implement, evaluate, and own their development.
Strong local organizations in the lead are key for the advancement
of Integral Human Development--the idea, rooted in Catholic Social
Teaching, that individuals and communities thrive best within healthy
social, economic, political and environmental ecosystems. Local
institutions and local leaders are critical for building, supporting,
and sustaining such ecosystems. Local organizations that can provide
critical social services to people outside of and in addition to those
provided by the government services, and through collective
representation, can help hold the public sector accountable to its
citizens. A robust, resourced, and representative civil society also
helps create more resilient systems and societies that can better
withstand shocks. Finally, supporting local organizations can help
advance the relations between the U.S. and other countries by expanding
the ``whole of society'' web of relationships between countries.
Over multiple Administrations, the U.S. Agency for International
Development (USAID) has made efforts to varying degrees of success to
strengthen local organization capacity and increase resource allocation
to local entities. These efforts have gained momentum in recent years
as the global humanitarian community signed on to the Grand Bargain,
former USAID Administrator Mark Green launched the Journey to Self-
Reliance, former Global AIDS Coordinator Deborah Birx advanced
localization within PEPFAR, and USAID Administrator Samantha Power
announced goals to direct 25 percent of all funds to local entities
within 5 years and to have local entities in the lead of 50 percent of
all programming by the end of the decade. These objectives are
significant and to reach them will require great change within USAID
and the entire ecosystem delivering humanitarian and development
assistance.
CRS wholeheartedly supports the objectives of locally led
development and humanitarian response. Locally led development and
humanitarian response are central to our values, an essential element
of our agency's vision, and will be critical to how we think about
changing our own systems and structures in the coming years. CRS will
seek to share capacity with local partners to receive and manage funds
directly from donors, support local organizations to achieve their
leadership ambitions and sustainability, and align our own operations
with our local leadership commitments.
principles to guide a more locally led system
For 80 years, CRS has partnered with the U.S. Government and local
entities around the world to assist populations in need. Grounded in
Catholic Social Teaching, we are guided by the principles of
solidarity, the idea of walking with and accompanying our neighbor, and
subsidiarity, the belief that those who are closest to a problem are
the best positioned to determine the right solution. Solidarity and
subsidiarity are at the core of our support for locally led development
and humanitarian response and help determine the following principles
that guide our approach to advancing localization:
Locally led development and humanitarian response requires local
actors as implementers and leaders. Efforts to support local leadership
must go beyond local program implementation to include ownership of all
development processes. A focus on local leadership means ``shifting the
power'' from the international to the local level in responding to
development and humanitarian challenges. For transformation of the aid
process, local organizations should also help lead the design of aid
programming, as well as shape development strategies of governments and
donors. Local actors should be part of donor processes like USAID's
Country Development Strategy Process, and humanitarian mechanisms like
Coordination Clusters.
Effective partnerships underpin effective transition to local
leadership. CRS' decades-long global experience has shown that
meaningful partnership that is rooted in trust, respect, and mutuality
provides the foundation for successful transition to locally led
development and humanitarian response. Ensuring strong relationships
with clear and negotiated roles and responsibilities, as well as clear
means of accountability between international actors, governments,
donors, and local institutions can help ensure sustainable locally
owned initiatives and maximal impact. Partnership requires
intentionality and sustained collaborative work to achieve successful
transition to locally led and owned humanitarian and development
efforts.
Holistic, not transactional, capacity strengthening is critical for
sustainable change. Too often donors, policy makers, and peer
organizations define locally led development as merely the ability of
local organizations to comply with donor regulations. However,
meaningful, and sustainable local leadership goes beyond compliance
capacity, and should instead include the resources, systems and
structures, staff and leadership needed for effective, appropriate, and
sustainable programming. Holistic capacity strengthening should respond
to goals developed by local institutions in collaboration with their
partners. Programs may address organizational weakness in finance,
programming, or compliance, but may also help local institutions
improve staff skills, organizational systems, structures, and
governance to lead more effectively and sustainably. Efforts can also
assist local institutions develop organizational resource mobilization
capacity, resulting in greater growth and sustainability. Capacity
strengthening should go beyond simply training to include investments
in organizational systems and structures, continuous technical
assistance, and constant coaching and accompaniment to ensure these
efforts take hold.
Funding mechanisms and conditions help determine localization
success. There are many advantages to a humanitarian aid and
development assistance system implemented primarily by local actors.
However, as USAID's Bureau for Humanitarian Assistance (BHA) recognizes
in its own Localization Strategy, structural and/or operational changes
will be required for success. Important factors for successful local
actor bidding and program design, implementation, and evaluation
include appropriate award size, operation timelines, and procurement
mechanisms, as well as adequate coverage of direct and indirect costs
for project implementation and risk management considerations. Less
directed, more flexible, and multi-year humanitarian funding;
harmonized funding and reporting requirements; improved transparency
and cost efficiency; and innovative tools and mechanisms such as pooled
funds and fixed amount awards all encourage and support local
institutions in taking more lead roles. All humanitarian and
development stakeholders should develop joint strategies to manage and
overcome compliance, due diligence obstacles, and move towards
effective risk-management and sharing. This must include ensuring
donors commit to covering local institutions' indirect costs.
A broad and inclusive civil society, including faith-based
organizations (FBOs), is important. Local leadership goes beyond
institutions that are immediately capable of being donor compliant or
``prime ready.'' There are many local actors that have important roles
to play in meeting development goals but may not be ready or interested
in serving as prime USG program implementers. In many places, non-prime
ready, or not-yet-prime ready actors are also reaching the most
vulnerable. These are important local leaders and institutions for
reaching program targets, and they need capacity support. Faith-based
organizations of this type can play a powerful role in reaching
communities and effecting meaningful change. Moreover, strong
associations of local organizations that influence and support a full
range of local organizations of various sizes and capacities are also
essential. A broad and inclusive civil society ensures that social
services and advocacy needs are addressed across a wide range of
sectors, geographic regions, and areas of economic and social needs.
Local leadership thrives in a political environment that allows civil
society engagement and that promotes effective civil society/local
government collaboration. Too often, closing civic space threatens
authentic and inclusive local leadership.
Government matters. Aid to civil society should not replace an
effective public social service sector. Strong partnerships with shared
responsibilities between the government, local civil society, private
sector, and others such as international non-governmental organizations
(INGOs) can result in transformative change at scale. CRS works with
local and national governments to strengthen their technical and
organizational capacity to deliver services, as well as with civil
society to help them fill gaps and ensure government is accountable to
its citizens.
opportunities to advance locally led
development and humanitarian response
While locally led development and humanitarian response work has
been ongoing for years, USAID and stakeholders have yet to fully
realize their collective goals. Shifting resources and power to local
leaders and their institutions requires political, economic, social,
and cultural change at every level of the system. Nevertheless, change
is possible if we can capitalize on momentum and seize the following
opportunities:
Local actors are ready. Opponents often argue that local
organizations lack the capacity to lead or are too risky to engage. We
disagree. Responsible, capable local organizations are ready to take on
more leadership roles. The world has changed and developed
significantly since the beginning of the modern aid system, and that
system must now realize that in many countries and communities, there
are local institutions led by capable, professional leaders--
experienced in their fields and endowed with their own expertise--ready
to take on new and expanded development and humanitarian assistance
roles. Many of these local organizations have not yet had the
opportunity to lead or implement programming at scale but can with
resources to strengthen their institutional systems and structures.
INGOs are ready to help. More than any time in recent memory, INGOs
like CRS and coalitions like the Modernizing Foreign Assistance Network
are ready to advance a vision of a more locally led future. We are
using our own private resources through projects like EMPOWER--
Empowering Partner Organizations Working on Emergency Responses--to
show proof of concept. We are managing transition awards and continuing
to accompany partners to ensure sustainability and demonstrate
solidarity. We advocate in Washington, DC for a definition of `local
entity' that truly reflects local organizations. We are pushing USAID
and international donors to report publicly how they are progressing
toward agreed goals.
Donors are on board. Increasingly, donors understand that working
more justly and equitably with and through local entities is the path
forward to maximize funding and impact. Since Administrator Power's
speech in late 2021, USAID has made significant efforts to reflect the
importance of localization in its development and humanitarian agenda,
including through the appointment of special advisors on localization,
and the release of a range of documents and policies to articulate
goals and paths forward. Whether through USAID's donor statement on
locally led development, its Local Capacity Strengthening Policy, or
more operational pieces like the Locally-led Development checklist and
Centroamerica Local, locally led development is clearly of keen
interest. With the Grand Bargain's renewal last year, government, NGO,
and multilateral signatories agreed that more action is needed to
actualize its vision of shifting the power towards greater local
leadership, and more effective, accessible, quality funding for local
actors. USAID's BHA reflects this prioritization in its own draft
Localization of Humanitarian Assistance Policy.
Evidence shows localization works. Donors have supported research
into the effectiveness of local leadership. Resources like USAID's
Journey to Self-Reliance Learning Agenda (https://2017-2020.usaid.gov/
selfreliance/self-reliance-learning-agenda), USAID's Stopping as
Success (https://www.stoppingassuccess.org/resources/) platform and
resource library, and their newly released Evidence Summary for Local
Capacity Strengthening all demonstrate the effectiveness of
localization efforts. In addition, PEPFAR has begun sharing data
results from its recent shift to utilizing locally led primes that
shows the effectiveness of this work. Academics and research
institutions have also begun to contribute to this evidence base (e.g.
recent journal articles like the International Journal of Disaster Risk
Reduction's International humanitarian organizations' perspectives on
localization efforts (https://reader.elsevier.com/reader/sd/pii/
S221242092200629X?token=146EF
98D858D90B2E55BFA262E3E8E047C856D8C84194A17824ED1049
99350DE8BE33618866873F64F49F1157DABB940&originRegion=us-east-
1&originCreation=20230120191042) or the Brookings Institution's recent
Obstacles and recommendations for moving U.S. development policies onto
a locally led path (https://www.brookings.edu/blog/future-development/
2022/05/09/obstacles-and-recommendations-for-moving-us-development-
policies-onto-a-locally-led-path/) ). More INGOs are active research
partners, and are producing a wide range of gray literature, including
extensive case studies, lessons learned, and briefs. There is also
growing research on the efficiency of locally led approaches, e.g.,
Passing The Buck: The Economics Of Localizing International Assistance
(https://thesharetrust.org/resources/2022/11/14/passing-the-buck-the-
economics-of-localizing-international-assistance), a recent study
estimating that local intermediaries could deliver programming that is
32 percent more cost efficient than international intermediaries.
experience demonstrates that localization works
CRS has learned that prioritizing investment in and advancement of
locally led development and humanitarian programming is the best way to
ensure our development and humanitarian interventions are effective,
efficient, and most importantly, sustainable. CRS has extensive
experience in supporting local actors, strengthening their capacity and
increasing their leadership of development initiatives. For example,
the CRS High-Performing Implementers (HPI) Initiative offers partner-
led, CRS-facilitated capacity building, focusing on leadership,
procurement and supply chain management, financial management, and
overall program quality to help place local public and non-profit
institutions in the driver's seat of their own growth as sustainable
principal recipients of donor funding. Supporting local actors in this
way can advance the transition to a locally led future.
CRS led the USAID-funded Sustainable Outcomes for Children and
Youth (SOCY, 2015-2021) project in Uganda. This project was designed to
improve the health, economic, educational, and psychosocial wellbeing
of orphans and vulnerable children and their households, as well as
reduce abuse, exploitation, and neglect among this population. Through
a network of civil society organizations, social workers, and frontline
para-social workers, SOCY provided services that reduced the risk of
HIV and violence and linked individuals to much needed services. The
$45.5 million budget investment funded local civil society capacity
strengthening to meet the needs of children and families, and 13 local
partner institutions. All partners demonstrated increased
organizational performance, and one, the Transcultural Psychosocial
Organization (TPO), has now transitioned to become a major prime
recipient of U.S. Government funding. With TPO, CRS used additional
funding and time to provide on-going technical assistance--beyond the
life of the project--to help TPO successfully move into a program
leadership role. This experience highlights the importance of strong,
trust-based partnerships, as well as appropriate timelines and adequate
investment in on-going capacity strengthening for effective local
leadership.
In The Gambia, CRS implemented an $11 million Global Fund malaria
program as co-Principal Recipient with the Ministry of Health from
2010-2018. CRS' strong partnership with national and local
organizations eventually led to full transition of the Principal
Recipient role to the National Malaria Program. During this period,
malaria parasitic prevalence decreased from 4 percent in 2010 to 0.1
percent in 2017 while malaria infections decreased by 50 percent across
all regions of the country between 2011-2017. The project's
interventions contributed to improved outcomes, including uptake of
Intermittent preventive treatment by 82 percent of pregnant women
(target was 85 percent), and reported bed net use by 94 percent of
pregnant women, 95 percent of children under 5 (target was 85 percent),
and 83 percent of other household residents (target was 60 percent).
CRS continues to support The Gambia through accompaniment to improve
monitoring and evaluation systems and modify approaches to move closer
to disease elimination. The National Malaria Control Program and other
government agencies are replicating CRS' approach to behavior change in
other sectors, and many government and local NGOs have
institutionalized the use of digital systems for data management and
reporting as part of project implementation. Now in our Sub-Recipient
role, CRS provides technical support on SMC data management and
initiated a cross-border pilot project between Senegal and The Gambia.
CRS has also seen it is possible to support local organizations to
lead humanitarian action. In 2018, CRS launched the EMPOWER project to
strengthen the humanitarian response capacity of local partners by
providing accompaniment and support in diverse areas, including
business development; program management; monitoring, evaluation,
accountability, and learning; finance; supply chain management; and
protection and safeguarding. CRS implements EMPOWER in Latin America
and the Caribbean, Asia, and West and Central Africa with 79 local and
national partners in 58 countries. Through the EMPOWER project, local
organizations in Brazil, Colombia, and Peru have received direct
funding from USAID's BHA and the Department of States' Bureau for
Population, Refugees, and Migration to respond to humanitarian needs
across the region. Due to the successful model in South America, CRS
has partnered with BHA to support similar efforts in Central America
and now also West Africa.
These examples demonstrate the effectiveness of locally led
development and humanitarian response. The core development and
humanitarian goals remain the same--to save lives, reduce poverty,
uphold dignity, and promote peace, but the roles in which we accomplish
these goals are shifting. Locally led development and humanitarian
response is not one size fits all. Context matters. Supporting a local
entity to respond to the needs of orphans and vulnerable children in
Uganda is quite different from accompanying a local entity in Brazil
respond to a migration crisis. How we approach localization is
dependent on many factors, but when solidarity and subsidiarity drive
the vision, it is possible to advance our goals.
challenges to advance locally led development and humanitarian response
To capitalize on the momentum and take advantage of the
opportunities in front of us, we must not fall victim to the obstacles
that have impeded progress in the past. This change will not be easy,
as it requires expending political capital and the will to drive change
in policy, processes, procedures, and practices. In our favor now,
unlike in previous iterations, Congress, the Executive branch,
implementors, and local groups are largely aligned in our collective
goal. However, we also know that in previous efforts, when the enormity
of the task became clear, staff and resources were not brought to bear
to make the changes needed and inertia set in. This will take sustained
energy and investment. In particular, we must address the following
challenges:
Tracking progress. Based on Administration reports to Congress we
know that only .82 percent of humanitarian funds from the International
Disaster Assistance account and 7.2 percent of all USAID funds were
obligated directly to local entities in FY21. With these two figures as
baselines, we have a long way to go to meet our goals. And while money
isn't the only indicator of success, it is an important metric.
Unfortunately, one singular definition of ``local entity'' does not
exist across the U.S. Government or international organizations to
measure progress toward results. USAID uses the definition of ``local
entity'' found in ADS 303, which can include non-local entities. USAID
will not track progress toward the 25 percent metric using the ADS 303
definition, but instead on three indicators found in existing
government tracking: project place of performance, organization
headquarters, and organization registration. Without a unified
definition and methodology to calculate target results, it will be more
difficult to assess progress and understand the overall picture of
funding realities on the ground. In a research paper released recently
by Publish What You Fund (PWYF) titled `Metrics Matter (https://
www.publishwhatyoufund.org/projects/localization/),' PWYF demonstrated
that different measurement approaches result in dramatically different
numbers, impacting how we perceive progress.
Taking good policies and putting them into action. As noted above,
recent years have seen tremendous progress at the policy level in
support of locally led development. From the Grand Bargain to the Local
Capacity Strengthening Policy, to regional pilot initiatives, and the
emerging BHA localization policy, we see the affirmation across USG
that locally led development is important. Now is the time to move from
policy to practice and from concept to reality. Donors, including
USAID, must take on the hard work of change at the financial,
operational, and cultural levels. They must break down the enduring
silos between development and humanitarian assistance; examine and
address the pain points and barriers embedded in the procurement
process that hinder localization progress; and make real and tangible
investments in the implementation of localization policies.
To advance progress on localization, local capacity and procurement
practices must be considered and addressed together. For many local
institutions, the sole roles accessible to them have been as project
sub-recipients, or task-specific sub-contractors. If they have primed
awards, they have often been smaller and/or limited awards. As more
donors look to increase funding to local institutions, the size of
awards, the choice of instrument, and the timeline of the funding
significantly affect their success. For example, in a given country a
range of institutions may be able to take on a $1m multi-year
assistance award. However, leading a $20m contract may be overwhelming.
This difference is not a reflection of their inherent capacity, but
rather the robustness of their current organizational systems that were
developed to match currently available funding.
Constraints in the larger aid ecosystem. While USAID is the leading
humanitarian and development donor in the world and has led the
conversation in the U.S. around locally led development and
humanitarian assistance, broadening these efforts within the
interagency and among multilateral donors will be a challenge. Changes
will need to occur within other U.S. donor agencies such as the
Department of State and multilateral actors that receive U.S.
Government money such as the United Nations.
Simultaneously, while USAID and others are advancing localization,
civic space is under threat. We know from experience and from
documentation such as Civicus' Annual Report on the State of Civil
Society (https://www.civicus.org/index.php/media-center/reports-
publications/socs-reports) that in many places around the world, civic
space is deteriorating. For local organizations to thrive, they need
the space to do their work and engage with communities and government
free of constraints. Ensuring that third sector institutions can
operate safely and thrive is critical to the localization agenda.
recommendations to the u.s. government
Grounded in our principles and based on our experience, CRS makes
the following recommendations to the U.S. Government to help advance
locally led development and humanitarian response:
Money matters: keep momentum and ensure increased funding and
increased opportunity for local leadership. The Administrator laid out
an ambitious goal to increase direct USAID funding to local entities to
25 percent by 2025. Though challenging, ensuring local actors have
access to the resources necessary to lead and carry out their mission
is critical. Donors, policymakers, and practitioners must double
efforts to increase funding to local actors, while also supporting
local institutional participation in all development and humanitarian
decision-making processes, including the development of Country
Development Strategies and humanitarian coordinating Clusters.
Oversee progress toward results: ensure accurate data collection
and transparency. Thanks to reports submitted to Congress required in
Fiscal Year 2022 State, Foreign Operations, and Related Programs
appropriations, we know very little funding is currently reaching local
actors. Similar report language was included in the Fiscal Year 2023
SFOPS appropriations report. We urge Congress and the Senate Foreign
Relations Committee to continue to support the inclusion of
appropriations language to require a report from USAID that assesses
progress toward results and provides data on funding to local entities,
disaggregated by country. As USAID grapples with burden busting and
reporting accurate information, we urge Congress to work with the
Administration to ensure in the future this data can be readily
available on ForeignAssistance.gov to interested stakeholders.
Ensure adequate investment in holistic, not transactional capacity
strengthening. Good partnership and effective capacity strengthening is
critical for any effort to support local leadership. Based on decades
of experience, and in accord with USAID's 2022 Local Capacity
Strengthening Policy, we insist that donor agencies fully fund
comprehensive, holistic and participatory capacity strengthening
approaches that ensure participatory, locally led capacity goal
setting, and go well beyond simple transitional one-off activities. It
is also important for USAID and other donors to plan, fund and give
time in partnership activities, while also exploring new funding
mechanisms to incentivize and support INGOs to play different roles in
humanitarian response and development assistance programming.
Focus on the details: improve acquisition and assistance mechanisms
to open the door to local partners. Strengthening local capacity is
important. However, equally important are the mechanisms that help or
hinder access to critical development resources. To truly `shift the
power' and increase opportunities for local leaders and their
institutions, Congress must work to: ensure size of awards are
reasonable for local actors to design, bid for, implement and evaluate;
set timelines for design and implementation that reflect local
capacity; align the choice of funding instrument with local actors'
capacity to respond and comply, including using mechanisms that do not
require significant upfront resources from bidding organizations; and
embrace flexibility in funding and adaptive management approaches.
Efforts must also be made to develop and fund strategies to manage risk
and help local organizations manage the extensive security, fiduciary,
legal and other risk and compliance measures, and to strive to
harmonize minimum criteria among donors, share information on the
criteria, and expand pooled fund coverage.
Beyond USAID: urge other actors to advance localization. The United
States has emerged as a clear leader in the movement for a more
localized aid system, and recent efforts (such as the joint Donor
Statement on Locally led Development (https://www.usaid.gov/
localization/donor-statement-on-supporting-locally-led-
development#::text=We%20will%20work%20to%20prioritize,and%20sustainable
%20approach%20to%20development) ) demonstrate U.S. influence on the
wider circle of donors. Nevertheless, broad agreement across the U.S.
interagency or within the United Nations will not foster lasting
change. Congress must work with USAID to ensure their efforts are not
in vain and apply pressure to multilateral donors such as the United
Nations as well as other donors within the U.S. Government to ensure
that all development and humanitarian assistance advances localization.
Thank you, Chairman Cardin, Ranking Member Hagerty and the
subcommittee for your leadership and dedication to supporting poor and
vulnerable communities around the world. We look forward to working
with you in the coming months and years to advance locally led
development and humanitarian response.
Senator Booker. Truly phenomenal testimony.
In deference and respect to my friend and colleague, I want
to offer you the opportunity to ask questions first, sir.
Senator Hagerty. Thank you, Chair Booker. Appreciate that.
I would like to start with you, Dr. Steiger, and given your
time in government as chief of staff at USAID with the
outstanding Administrator Mark Green, I would like to just get
some foundational questions answered with you about development
in localization, and I touched on this in my previous set of
questions.
From your perspective, how did the agency view its
localization efforts under the Journey to Self-Reliance
Initiative that I touched on before and how did you view those
localization efforts fitting into the Administration's National
Security Strategy?
In particular, did you see development in localization as
supporting our U.S. and allied strategic competition with
Communist China? I would like to know what the lessons learned
might be.
Dr. Steiger. Absolutely. Thank you, Senator, for the
question.
The answer to your question is yes, simply. Localization
was a key part of the Journey to Self-Reliance because it was
obvious to us that building long-term sustainability, long-term
self-reliance on the ground, means working with local
organizations first and over the long term.
It is hard to do that with intermediaries. There is a role
to play for U.S.-based organizations to be umbrellas, to be
mentors, to facilitate the kind of relationships that Bill
talked about that CRS did in Nigeria.
Over time and with specific metrics, those kinds of
relationships have to move on to transition to full ownership
and implementation by local organizations and one of the main
reasons for that is visibility.
As you know well, Communist China--the Chinese Communist
Party and others of our adversaries are excellent at branding
their assistance on the ground. Everyone knows what that flag
means with the red stars on it.
Even to take a more benign example, everyone knows what the
rising sun of the Japanese flag means when they see it on a
building, on a bridge, on a hospital.
Our logos--even the great one that is ``From the American
People''--are washed out in a sea of other logos and colors,
mostly from our implementers. This is particularly true when we
use United Nations organizations.
It is hard for people to see and feel what we do when we
use intermediaries. Local organizations are far more likely to
give us credit, and they are far more likely to be involved in
programs that show local people that what they are receiving is
from the American people.
We saw localization as an integral part of trying to
counter our adversaries on the ground in this great power
competition.
Senator Hagerty. Can I stay on the lessons learned topic
for a few more minutes with you? I am going to extract a quote
from your testimony to put it into context.
You stated that USAID already has the legal authorities and
other tools necessary to pursue a comprehensive localization
agenda and does not need congressional action with two possible
exceptions including the authority to create a working capital
fund for acquisition and assistance.
The challenges the agency faces in localizing its portfolio
of awards are self-imposed as USAID often chooses not to
exercise the authorities it enjoys.
If you could elaborate a bit on that. What authorities
exist that are not being exercised and what can we learn from
that?
Dr. Steiger. Absolutely, and I will follow on many of the
things that Michele Sumilas said.
The agency, over time, has imposed upon itself a series of
bureaucratic processes that make it very difficult for
Contracting Officers, Agreement Officers, innovative staff in
the field, to really use what is an extraordinary set of
procurement authorities that USAID has as an agency.
I would say that there is virtually no other entity in the
Federal Government that does procurement at this scale that has
the flexibility on paper that USAID does.
One example is a marvelous, almost magical, authority
called Other Transactional Authority, which is the ability for
the agency to take almost any kind of money and create almost
any kind of relationship it wants to within certain legal
boundaries with, for example, private sector entities.
USAID has a slew of innovative ways of doing awards with
small and local organizations. Ms. Sumilas mentioned Fixed
Amount Awards, but there are Fixed Price Contracts. There are
other kinds of relationships with local entities that can be
drawn up.
For a variety of reasons, the agency's procurement
infrastructure--the bureaucratic node of the Management
Bureau's Office of Acquisition and Assistance--is extremely
conservative in allowing people in the field to use those
authorities to work directly with local organizations.
Senator Hagerty. Are these limitations published
guidelines? Are they rules that have been made or are these
informal limitations?
Dr. Steiger. This is part of the problem. We and this
Administration have worked very hard to make the documents
around these issues pretty clear, to the layperson anyway, that
things are permissible.
It is a cultural and, perhaps even philosophical problem
that what holds people back in many cases is not the letter of
the policy or the regulation, but someone's interpretation of
that regulation, often shrouded in myth or in legend.
You have people who will take the letter of a policy or the
Federal Acquisition Regulation, go to Washington and say, ``We
would like to do this,'' and they will be discouraged from
doing so by people who are not really on board with the idea
that the agency should be doing things in a new and innovative
way.
Senator Hagerty. Thank you for your testimony.
Mr. Chairman, back to you.
Senator Cardin [presiding]. Thank you.
Let me first apologize. We have the safety issue in regards
to the rail spill in the Environment and Public Works Committee
today. Part of the watershed comes into Maryland, so it is an
issue of public safety in our state. I apologize for leaving
the committee and not hearing your testimony directly.
Mr. O'Keefe, I am going to start with you because CRS is
critically important to our development goals globally, but you
are also important to my community. I thank you for what you
do.
I really want to understand from you. I look at CRS as
having a similar mission that USAID has, that you are globally
engaged for all the right reasons and your values are our
values.
As we move towards localization, which we all support, what
are the risk factors that could affect your ability as an
institution to provide the services that you are able to do
today?
Mr. O'Keefe. Thank you, Senator. That is a great question.
I think we, in some ways, are blessed with having a network
of partners and operate in a localized way in most countries
already ourselves, and so as our partners have gotten stronger
over the years, our role has constantly evolved and I think we
are confident that as USAID has more direct relationships, as
we help to strengthen capacity of more of our partners, we will
be--play a critical role, but at a different level.
For example, rather than focusing on particular health
clinics, we will focus on improving the health system. In the
Gambia, for example, we have a global fund project that for a
number of years was working with the ministry of health--their
office of malaria control--to build their capacity and under
that project our--the malaria incidents dramatically dropped
and, more importantly, in some ways, the ministry was able to
take over running of that operation.
Rather than us providing the direct malaria response, the
government is now able to do so in a sustainable way and will
be playing a role at that kind of higher level.
We are not afraid of a new world where we have to adapt and
compete at a higher level and I look forward to doing that and
as part of the community in Maryland as well.
Senator Cardin. That is helpful, and as--we really
appreciate your input today, but we invite you for continuing
input to our work as we try to get this right. We want to make
sure that we do not compromise the current tools that we have,
that we all are working on the same way.
Ms. Aquino, I was interested in your testimony that you
seem to be supporting the USAID administrator and that they
need greater capacity in order to implement this. I was
interested--the lack of capacity, but as they move forward, how
does it affect your work?
Ms. Aquino. Yes, thank you for that question, Senator.
Thank you for that question, Mr. Chairman.
The lack of capacity at USAID, I think, is pervasive in
terms of being able to really implement this and what I would
say--I am just back from Colombia where I had the privilege of
meeting with our USAID staff there--and it is unclear--it seems
to me that it is unclear for staff at the local level whether
these directives should be implemented immediately, what is the
timeline for implementing this, what are tools that they can
have at the local level to understand deeper what is happening
in communities.
In general, I do not get a sense that there is a lack of
willingness. I get a sense that there needs to be more training
and more support.
As Mr. Steiger mentioned, there are tools that are
available, innovative tools that USAID does have. Do all our
staff at--the USAID staff at the local level know of these
tools and how to use them to support local communities?
All of that working better would certainly help for this
locally-led agenda to be delivered.
Senator Cardin. Thank you.
Mr. Steiger, you have seen this up close and personal. You
have heard the testimony today. You hear the Administration
wants to move to 25 percent localization. Tell us your greatest
concerns and risks in the way these policies could be
implemented.
Dr. Steiger. Thank you, Senator.
Mr. Chairman, the greatest risk is that the 25 percent
target, which I support and I actually think should be higher,
becomes an excuse for the agency and some of these larger
partners to believe that business as usual can continue with
the other 75 percent or the other 50 percent.
These reforms, as Michele Sumilas alluded, have to cover
the entire portfolio, whether awards with local partners or
not. Otherwise, this initiative, as its predecessor in the
Obama administration did, will end up getting pigeonholed and
sidelined.
Local Works did a lot of good things and USAID Forward did
a lot of good things, but the agency was able to basically
surround them. Its antibodies came out and surrounded these
good initiatives and kept them as very small niche enterprises,
at the end of the day. This Administration's push for
localization cannot afford to fall into that trap.
I think the more that the agency, from the top down, moving
to the local level, can extend these reforms to the entire
portfolio, including humanitarian assistance, by the way, not
just development assistance, then they have a greater chance of
surviving.
Senator Cardin. I think that is a key point. We are talking
about changing a delivery system and if it just is used as an
addition and we do not really integrate it, it loses the reason
why we are doing this.
It becomes then a set aside or a dollar number rather than
it becomes part of the ingrained way in which we are meeting
our development goals. I think that is an extremely important
point. Thank you.
Senator Hagerty.
Senator Hagerty. Thank you for holding the hearing today,
Mr. Chairman. I have had the opportunity to question this group
of witnesses.
I would just say this. We obviously have a lot of work
ahead of us in terms of helping modernize USAID's approach,
too. I appreciate the approach that Ambassador Power is taking.
The localization direction from a private sector
perspective makes so much sense to me, and to the extent that
we can learn lessons from the past and help the organization
accept a new vision, I think we can achieve something great
here.
I look forward to working with you on this more.
Senator Cardin. Thank you.
I thought you started the hearing with mentioning PEPFAR
and I know there are differences and you cannot use one
example, and we made a huge additional investment when we did
PEPFAR.
The results speak for itself. The local capacity is there
and it is making a huge difference. I think the last comment
that was made about whether we can engrain that type of local
responsibility and capacity into our foreign assistance--
development assistance programs--really is what localization is
about. I think we all support it.
It will be interesting to see whether they have the
capacity and the--I guess, the sustainability to make this work
throughout our development assistance goals and, as pointed
out, in some areas it is just not possible. We recognize that.
We have to be sensitive to the local communities.
Senator Hagerty. As you very ably pointed out, building
that capacity creates or yields dividends well beyond the
initial purpose and I think we have seen that take place and
very much appreciate that observation.
I hope we have metrics that can capture that broader
benefit as we think about the investments that we make here.
Mr. Chairman, could I also just make a request to enter
into the record two written statements that were voluntarily
submitted by two individuals--David Berteau, president and CEO
of Professional Services Council, and Allassane Drabo, West
Africa regional director at Search for Common Ground? If I
might enter these.
Senator Cardin. Without objection, those two statements
will be made a part of our record.
[Editor's note.--The information referred to above can be found
in the ``Additional Material Submitted for the Record'' section
at the end of this hearing.]
Senator Hagerty. Thank you.
Senator Cardin. The record will remain open for questions
for the record until close of business tomorrow, Friday. I
would ask our witnesses to please respond promptly to those
questions that are submitted for the record.
With that, I want to thank our three witnesses not just for
your participation here, but for your commitment to global
issues that are so important to our national interests.
Thank you all. With that, the subcommittee hearing will
stand adjourned.
[Whereupon, at 12:00 p.m., the hearing was adjourned.]
----------
Additional Material Submitted for the Record
Responses of Ms. Michele Sumilas to Questions
Submitted by Senator Benjamin L. Cardin
Question. How have local partners been involved in co-development
processes to ensure local context allows for and supports the aims of a
program?
Answer. USAID uses many forms of collaborative action in our
missions to encourage and ensure local input and ownership of our
programs. We use co-creation, co-design, and co-development at
different periods of time and for different purposes.
Co-creation is a design approach that brings people together to
collectively produce a mutually valued outcome. It employs a
participatory process that assumes shared power and decision making. In
a co-creation, USAID convenes a group that may include Mission staff,
partners, potential local implementers, local communities, and other
stakeholders to address a specific problem. The participants agree upon
shared goals and objectives, identify existing and new solutions
aligned with local realities, build consensus around action, and refine
plans to move forward with programs and projects. While USAID is the
sponsor of this creative effort, it does not have to be directly
involved. Indeed, the power of co-creation is its emphasis on those
closest to the problem, the ability to enable local actors to bring
their perspectives, experiences, capabilities, and ideas to the fore.
In this way, an effective co-creation fosters local ownership and
accountability and can generate results that are both effective and
sustainable.
Co-creation is not required and can occur during the award process
(pre-award and post-award) or independent of an award. Often, co-
creation is a valuable implementation tool. It is important this
approach is used with purpose and intent as appropriate.
Co-design is a growing feature of USAID-implementing partner
collaboration. Usually, it involves USAID and an apparently successful
applicant or offeror working together to shape and finalize a program
description or statement of work. Through collaborative brainstorming
and problem solving, this process serves to produce fit-for-purpose
solutions. Though the partner may not be finally selected, ownership
over the planned work is heavily shared. Co-design processes may also
occur in non-competitive settings to discuss the feasibility of
specific ideas for future programming or as part of an existing funding
mechanism.
Co-development is a different, broader effort by USAID in a similar
vein. It focuses on the ``how to'' of the work in progress and involves
significant input from USAID. Co-development emphasizes the shared
conversation of what to do next. Co-development can occur throughout
implementation and at several levels, from the entirety of a program,
to a workplan or specific interventions, or a discussion of the
viability of new ideas. As such, co-development is usually an on-going
approach unlike co-creation, which is usually time-limited; co-
development also always involves USAID staff.
These collaborative approaches are among the core Agency practices
promoted to ensure that local leadership is reflected in USAID
programming. USAID can co-create strategic priorities, program designs,
work planning, implementation, monitoring, evaluation, learning and
closeout, using a variety of approaches and mechanisms.
During strategy development, Missions may consult with local actors
to identify challenges and opportunities through consultative
workshops, advisory boards, and working sessions with government
counterparts. Co-creative approaches are particularly valuable in
complex settings where various stakeholders need to work together to
identify solutions. For example, USAID/Myanmar used a non-competitive
co-creation event to identify local solutions to the heroin epidemic in
Kachin State. A local advisory committee convened more than 100 local
stakeholders to participate in a ``Whole System in the Room'' workshop,
where participants identified common priorities to address the epidemic
and began forming a local network to implement solutions. The outcome
of this co-creation then informed USAID/Myanmar's direct awards to
local actors in Kachin to improve access to health and support
services, and vocational training, and to promote healthy behaviors and
raise awareness among non-drug users.
There are numerous creative ways that USAID co-creates during the
award process, including with a funding notice like an Annual Program
Statement (APS), Global Development Alliance, or a Broad Agency
Announcement (BAA), which puts forth a problem statement and challenge
in search of a solution. These invite local actors to bring innovative,
local ideas to inform the direction of existing or new programs.
The Agency may use multi-step or phased requests for concepts
followed by proposals or applications to iteratively co-create ideas
and approaches. USAID/Malawi engaged in a local-only BAA and co-
creation process that brought together local actors ranging from
private entities to academia, most of whom were new to working with
USAID. This enhanced collaboration promoted the spirit of problem
solving, and ultimately seven awards were made to new local partners.
Missions are also using notices of funding opportunities that
restrict eligibility to local applicants to co-design assistance awards
to local and non-traditional partners for innovative, adaptive, and
locally led development approaches. For example, through an addendum to
the Agency's Local, Faith and Transformative Partnerships ``Locally Led
Development APS,'' USAID/West Africa held a 3-day co-creation workshop
with local private sector associations and support organizations. This
entirely virtual workshop brought together participants from across the
West Africa region, creating opportunities for collaboration and
continued co-creation, co-development, and co-financing. Ultimately,
this effort produced three awards to new and local partners across the
region.
Other ways USAID is being less prescriptive and opening the door to
local actors to bring new ideas, resources, approaches, and
partnerships to the Agency through co-creation include local advisory
boards, such as the youth advisory boards established in Zimbabwe and
Guinea, which were convened by the USAID Missions to advise on new
Mission programming to support youth entrepreneurship.
USAID also employs co-creation during implementation, monitoring,
learning, and adaptation. For example, the USAID Cooperative
Development program conducted a collaborative redesign process with
implementing partners to pause and reflect, revisit assumptions, and
incorporate early learning into the program plan around 12-18 months
into activity implementation. This process was an ideal time to ensure
program timelines and targets aligned with local realities and
priorities and created an opportunity for USAID and international and
local partners to work together to update their plans, indicators of
success, and target goals to align with emergent priorities and
learning from their first year of implementation.
Overall, between FY 2018 and FY 2022, USAID increased our use of
co-creation in the award process from 18 percent of new awards to 35
percent of new awards (inclusive of all awards, not just those with
local partners). And while co-creation is not required, nor relevant
for all awards and agreements, we do recognize the importance of
gathering input from those--usually local actors, organizations, or
institutions--closest to the problem. To help encourage USAID staff to
consider co-design and co-creation as part of the award and agreement
development and implementation processes, we will begin to track these
two practices as part of our new indicator to measure USAID's
performance toward its target that, by 2030, half of our programs will
enable local leadership over priority setting, activity design,
implementation, and measuring results. More information about this
indicator will be available in our FY22 Localization Progress Report,
expected to be posted by mid-April.
Question. Has USAID done an audit on how many local formal and
informal groups it supports as sub-grantees of its programs? What were
the findings?
Answer. USAID has not conducted an audit on how many local entities
it supports as subcontractors and subrecipients of its programs. Prime
contractors and recipients are required to report subcontract and
subaward data in the Federal Funding Accountability and Transparency
Act (FFATA) Subaward Reporting System (FSRS). Reported information is
made publicly available on USASpending.gov but is often incomplete.
Recently, USAID issued a reminder to prime contractors and recipients
of the importance of accurately reporting subcontracts and subawards in
FSRS to promote transparency, accountability, and visibility of data
regarding Agency-funded activities.
Question. You mentioned a goal to empower more than the current 20-
30 FSNs authorized to contract to a more substantial number. What is
the intended goal and by what timeframe do you intend to reach it? What
is the distribution plan for these FSN positions--will there be
authorized FSN positions at every post?
Answer. As outlined in the Implementation Plan (https://
www.usaid.gov/sites/default/files/2023-03/AA-Strategy-Implementation-
Plan-3-2023-draft.pdf) for USAID's new Acquisition and Assistance
Strategy (https://www.usaid.gov/policy/acquisition-and-assistance-
strategy), USAID's goal is to increase the number of Foreign Service
Nationals/Cooperating Country Nationals (FSNs/CCNs) with administrative
warrants from 19 in FY 2022 to 38 by the end of FY 2023. As of March 9,
2023, USAID has 35 CCN Administrative Contracting/Agreement Officers
(ACOs), though this number fluctuates constantly. Administrative
warrants are issued at the request of Missions. The number of warranted
FSN/CCN ACOs per Mission is subject to Mission needs for additional
coverage, the number of qualified candidates, and the capacity for
Mission COs to provide the required oversight.
Question. Can you outline the rough estimates for increase in USAID
FSOs that the 15 percent increase in OE funding would support?
Answer. Through our Global Development Partnership Initiative
(GDPI), we aim to grow the Agency's permanent direct hire workforce by
28 percent by 2025. The GDPI would expand our cadre of Foreign Service
(FS) employees to 2,500, our Civil Service employees to 2,250, and our
Foreign Service Nationals (FSNs) by 206 positions to around 4,700. GDPI
will allow the Agency to build a diverse workforce that represents
America and is equipped to tackle unrelenting international challenges.
The FY 2024 request includes an additional 105 Civil Service and 125
Foreign Service, as a further step towards meeting these goals.
Our reference to 15 percent was not for an increase in operating
expenses (OE), but rather the flexibility to use up to 15 percent of
appropriated program funds for operational and administrative costs
associated with the project (as we currently do under the Local Works
program and under the directive for locally led development in northern
Central America). There are several benefits to having this flexibility
when working with local partners. First, though local partners should
be seen as equally capable compared to U.S. or other traditional
partners, their relative inexperience working with USAID may require
additional USAID staff time in order to guide them through the Agency's
compliance and reporting processes, technical and operational standards
for programming, among other support. Part of how the Agency provides
that additional guidance is by providing local partners with capacity
and compliance support in various forms, which requires additional
(non-programmatic) resources.
Local partners also tend to receive smaller awards than traditional
partners, and issuing a greater number of awards to these local
partners requires additional USAID staff support (compared to managing
a single, larger award to a traditional partner). Having the
flexibility to use program funds to cover these kinds of award
management costs would better enable USAID to expand and diversify its
local partnerships at or above the Administrator's targets.
Thus, while this 15 percent flexibility would not necessarily be
used directly for hiring additional staff, it would give our current
staff the resources they need to better support more local partners.
Question. Do you support increased language training for USAID FSOs
as a mechanism to enable more USAID FSOs to interact directly with
local NGOs?
Answer. Direct engagement is crucial to the success of USAID's work
because it fosters localization of USAID programs and provides FSOs
with unfiltered information to better inform decisions for U.S.
taxpayer money spending. Foreign Service Officers (FSOs) are already
utilizing their language skills, in addition to the expertise of USAID
Foreign Service Nationals (FSNs) and implementing partners, to engage
with local NGOs, host government officials, and participants in USAID's
programs. Increased language training for FSOs could augment current
engagements with external stakeholders.
The required languages for tenure and language-designated positions
are captured in USAID ADS 438 maa (https://www.usaid.gov/sites/default/
files/2022-05/438maa.pdf). Language assessments are offered to
potential new hires for USAID in tenure languages as part of the
Foreign Service hiring assessment for extra points. Language training
timelines can vary depending on the level of proficiency of the Foreign
Service Officer (FSO). Depending on the language needs of individual
employees, USAID can provide access to language training for FSOs at
the Foreign Service Institute (FSI).
In addition to the language training offered at FSI, USAID's Office
of Human Capital and Talent Management (USAID/HCTM) offers USAID staff
and their eligible family members (EFMs) access to free foreign
language applications such as Mango Languages and Rosetta Stone to
foster ongoing foreign language skills development. USAID/HCTM also
funds the Mentored Foreign Language Course at the State Department's
Foreign Service Institute (FSI) to empower EFMs to fill staffing gaps
in critical Mission-level positions.
FSOs can also receive one-on-one language training through a
contracted vendor that has adopted FSI curriculum content, design and
assessment procedures to ensure standardized learning methodologies
that can result in a higher success ratio for meeting language
proficiency. This one-on-one environment allows learners to absorb
meaning intuitively, with a focus on developing speaking, reading,
writing and listening skills. The total immersive environment enhances
learner engagement. This instructional model provides real-life
interactive scenarios to engage learners in conversation and build
vocabulary and grammar skills.
______
Responses of Ms. Elana Aquino to Questions
Submitted by Senator Benjamin L. Cardin
Question. How do you think USAID could best approach its policies
and structure to address the problem of institutional racism in
development that you raised?
Answer. Racism creeps in in numerous ways: big and small, conscious
and unconscious. Some of the ways we can see the impact of racism
creeping in, resulting in racist beliefs becoming standard and being
perpetuated are through USAID's structures and procedures.\1\ For
example, it's often wrongly assumed that local civil society
organizations do not have the capacity or ability to implement
programs, especially when based in non-Western contexts. Then, it is
deemed necessary to rely on international organizations with country
offices to lead, a majority of which are based in Global North
countries, believing that they are the sole legitimate option. Another
example is the assumption that we cannot partner with local
organizations due to rampant corruption and mismanagement of funds.
Just as corruption does not see color, we cannot assume that every
local actor is corrupt.
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\1\ https://www.peacedirect.org/us/publications/race-power-and-
peacebuilding/
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Some of the ways that USAID could best approach its policies and
structures to address the problem of institutional racism in
development are, but not limited to: accessibility, equitable
partnership, flexible funding, training and diversity in hiring at
USAID and empowerment of Foreign Service Nationals to enact the locally
led commitments.\2\
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\2\ https://www.conducivespace.org/wp-content/uploads/2023/03/
Innovative-Practices.pdf
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Local civil society organizations globally welcomed Administrator
Power's commitments in November 2021 at Georgetown.\3\ Accessibility
remains one of the biggest barriers to working with USAID. The
processes, terminology and language used by USAID excludes most local
organizations who could otherwise be interested and willing to work
with USAID. Complex and internationally biased processes
disproportionately skew the chances of winning an award or partnership
in favor of U.S. organizations over local ones.
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\3\ https://static1.squarespace.com/static/
5fc4fd249698b02c7f3acfe9/t/
61afeeb21e86814389672abe/1638919859912/
Public+Letter+to+USAID+Administrator+
Power+from+local+actors+December+2021.pdf
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Additionally, terms used by USAID often do not translate clearly to
the local context. For example, a Peace Direct-led consultation with
local civil society organizations working to prevent atrocities in
eastern DRC found that ``terminology [like atrocity prevention] often
fails to encompass the realities of complex violence and ongoing
conflict dynamics and argued for more nuanced narratives.'' \4\
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\4\ https://www.peaceinsight.org/en/resources/escaping-perpetual-
beginnings/?location=dr-congo&theme=atrocity-prevention
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Moreover, the languages used must be diversified. USAID has taken
steps to make several major languages available in their
communications, but the Agency should go further to incorporate
indigenous languages and languages of other marginalized populations.
This must also expand to allow for grant proposals, reporting
requirements, and other forms of engagement with local civil society to
be received in the local language. In some instances, allowing for
verbal proposals and reporting requirements is vital as literacy rates
globally vary. The emphasis should be on whether local actors can carry
out the necessary tasks and have the credibility within their
communities to create a positive lasting impact, not whether they can
eloquently do so in English or in written format.
Simplifying and removing the barriers preventing local
organizations from working with USAID is key to addressing some of the
systemic processes that perpetuate racism. Also key is to speak
directly with local civil society networks in local languages to
understand how conflict, development concerns and humanitarian crises
are being discussed by local actors to ensure terminology is not lost
in translation.
In their localization process, USAID seeks to diversify who the
Agency partners with to deliver vital support globally. Working toward
diversifying partnerships is a good step. We think this can and should
be taken further. Equitable partnership, in our view, is the
relationship between individuals and organizations based on trust that
takes actionable steps to support the needs, priorities and agenda for
all parties involved. Many local actors have highlighted that the
current practice of partnership is prescriptive in nature and can
contain hidden agendas. External actors parachute in with pre-defined
solutions often without consultation or buy-in from local organizations
or communities. This overlooks or assumes the absence of the active
capacity, agency, expertise, and social, political, and cultural know-
how local actors bring to any context. We must add the element of
humility to recognize that we cannot understand the social, political
and cultural variables at play as well as local actors embedded in the
community. And to acknowledge that, as much as we may want to help and
have good intentions, aid delivered without community planning and
inclusion can be patronizing and harmful.
We believe partnerships should be trust-based, transparent, and
equitable all while maintaining decision-making power to be with the
local partner. USAID should develop active feedback loops, not only
from implementer to USAID, but also from USAID to the partner.
Withholding or not sharing information can create an environment of
mistrust and perpetuate an imbalance of power.
Flexible funding models employed by USAID should also be flexible,
inclusive, respectful, sustainable and trust based. In conflict zones
and humanitarian crises, the dynamics change daily if not hourly.
Funding models need to be adapted to allow local organizations to
change programming and how humanitarian support is delivered to have a
better chance of effectuating a positive impact in the community they
are serving. Funding needs to be deployed in a way that can reach local
actors directly, not country offices of INGOs.
International actors have many roles they can play, but creating
and implementing programs should be led by the local organizations.\5\
By solely working through international organizations, the U.S. sends
the message that local actors cannot be trusted, nor do we believe they
have the capabilities to carry out development, humanitarian or
peacebuilding efforts. When in reality, local civil society
organizations are often the first responders to any situation. Flexible
funding for local actors is the key to unlocking creativity and
adaptability for communities living in such volatile and unpredictable
contexts.
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\5\ https://www.peacedirect.org/us/publications/nine-roles-for-
intermediaries/
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Internally, USAID can benefit from hiring and promoting more
Americans from diverse backgrounds into its workforce. Diversity does
not stop at race, ethnic or religious background, but also includes
those who come from families of or have directly experienced being a
refugee or being displaced; hiring those who have lived experience or
have worked in fragile or conflict contexts.
The Council on Foreign Relations released a report in November 2020
entitled Revitalizing the State Department and American Diplomacy. In
this report, the authors suggest that if diversity and institutional
barriers are not addressed within the Department of State then ``the
challenges that DOS faces [to dismantle racism] risk causing
irreparable damage to America's standing and influence in the world,
ability to advance its interests overseas, and security and prosperity
at home.'' \6\
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\6\ https://www.cfr.org/report/revitalizing-state-department-and-
american-diplomacy
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A similar assessment and approach is necessary for USAID to
maintain its leadership globally as the largest development,
humanitarian and peacebuilding donor. However, hiring and promoting
more diverse Americans into the workforce will not alone address the
problems of structural racism within international development. Some of
the barriers are addressed above and more are explored in Peace
Direct's report, Time to Decolonize Aid.\7\
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\7\ https://www.peacedirect.org/us/publications/
timetodecoloniseaid/
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Finally, the training of USAID staff to overcome conscious and
unconscious biases and empowerment of Foreign Service Nationals hired
by USAID is vital for addressing institutional racism. As locally hired
staff, Foreign Service Nationals join USAID Missions with an existing
network and understanding of the local dynamics. However, this
expertise is not often utilized. Their exclusion from being fulling
involved in USAID programs is rooted in the underlying perceptions that
local people do not have the expertise, understanding or intelligence
to carry out the work that is delegated to international organizations.
Foreign Services Nationals are also subject to assumptions of
corruption therefore there is an effort to make their involvement
minimal. Some of this stems from conscious and unconscious bias of
USAID staff and overcoming this through training and intentional hiring
will be key.
Foreign Services Nationals can play the role of the convener to
bring together local civil society organizations for consultations or
shared learning. They can also access certain parts of the country
through their position as local community members. When funding models
at USAID are reformed to fit one that is flexible and directly local,
Foreign Service Nationals can also support USAID Missions and local
organizations by tracking the implementation of programs and even play
the role of interlocutor for open feedback loops between local
organizations and USAID.
The steps listed above are not exhaustive. Racism comes in all
shapes and sizes, conscious and unconscious, and if not curtailed, it
can continue to infiltrate institutional structures in ways that
disempower and marginalize rather than embrace and promote American
values.
Question. What changes and reforms are needed from USAID, and what
is needed from Congress to address this problem?
Answer. For the above changes to take place, it will take a
concerted and intentional effort by Congress and USAID. While Congress'
mandate is far more expansive than international development and
humanitarian support, USAID can bring in the technical expertise of how
their systems can be reformed to fit one that is inclusive, trust-
based, accessible, locally-led and sustainable. Congress can then hold
USAID accountable to these values and ensure that the meaningful
reform, implementation and active practice of these values are
enshrined in policy, replacing the antiquated and harmful policies that
promote racism and division.
The accountability measures from Congress to USAID can include
mandates for USAID Missions to work with Foreign Service Nationals and
other international organizations to host genuine consultation in
country to garner insights on how USAID is improving its systems
towards being locally-led while simultaneously addressing structural
racism. The findings and assessments from these consultations should
then be reported to Congress periodically. It is also important to flag
that Congress should push USAID to adopt a narrower definition of local
so that the metrics the Agency uses does not misrepresent the progress
of its commitments to localize efforts. Early last year, Peace Direct
worked with other prominent INGOs, notably Catholic Relief Services,
Mercy Corps, CARE, Save the Children, and the Hunger Project, among
others, to develop a set of definitions which distinguishes
international and local organizations. We define local as organizations
headquartered and operating in their own country.
Congress can also work with USAID and non-government organizations
to upgrade the current funding model employed by USAID. Upgrades should
include, but are not limited to, making grant proposals and reporting
requirements less burdensome for local organizations, allowing
resources to be used with flexibility especially in terms of timelines
and the planned work, and improving the funding system to allow for
resources from USAID to reach local organizations directly without the
need for international intermediaries.
Finally, Congress should increase the budget USAID has to work with
to ensure the Agency has the capacity it needs to shift from the
current model to one that is locally-led responsibly and to ensure that
this shift is sustainable. Lack of capacity is often wrongfully and
solely associated with local organizations; however, USAID also needs
to raise its own capacity to localize its work meaningfully.\8\
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\8\ https://www.brookings.edu/blog/future-development/2022/12/01/
rethinking-the-constraints-to-localization-of-foreign-aid/
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______
Responses of Mr. Bill O'Keefe to Questions
Submitted by Senator Benjamin L. Cardin
Question. Organizations like CRS can play a critical role in
helping to build the capacity of local civil society. What more do you
think could be done to focus more USAID efforts to leverage
organizations like CRS to further build the capacity of local NGOs?
Answer. CRS has a long track record of partnering with a diverse
set of local organizations, and works with approximately 1500 local
partners every year. We also have deep experience and expertise in
supporting partners to strengthen their capacity, not only to implement
specific projects, but also to sustainably provide a range of services
to vulnerable people and to hold their governments accountable. Our
approach is to deliver this kind of holistic capacity strengthening
that responds to partner needs and far exceeds setting them up as mini-
contractors.
We fully support the principals that guide USAID's new Local
Capacity Strengthening Policy, and think it has the potential to
transform USAID's work in this area--aligning capacity strengthening
with larger localization goals, and elevating models that are more
participatory, partner-led, and holistic.
The key now is for the vision to become reality and the policy to
become practice. Congress should ensure that the USAID has the staff
and resources to support INGOs like CRS to implement capacity
strengthening programming that matches the intent of the policy. To
scale the capacity strengthening needed to reach USAID's localization
goals, USAID must increase opportunities for INGOs like CRS to play new
roles--facilitating transitions to local leadership, providing
significant technical assistance, accompanying and mentoring local
partners as they take on greater leadership roles. Congress should
ensure that USAID is adequately resourcing these efforts, and that they
are accountable for progress in their implementation.
______
Prepared Statement of Dr. Tessie San Martin
Tessie San Martin, Ph.D.
CEO, FHI 360
Co-Chair, Modernizing Foreign Assistance Network (MFAN)
USAID Administrator Samantha Power has outlined what I believe is a
powerful vision to make foreign assistance more accessible, equitable,
and responsive. Her vision includes the ambitious target that 25
percent of USAID's funding will go to local partners by 2025, and that
by the end of this decade, 50 percent of its programming will place
local communities in the lead when setting program priorities, co-
designing, implementing or evaluating the impact of USAID-funded
projects.
sustainability, effectiveness, and evidence
Based on my experience, I consider the best argument for
localization and locally led development to be one of sustainability--
the activities our development assistance funds are more likely to
continue after our assistance ends if they are locally led and
implemented. There is evidence that supports the argument that locally
led programming, aligned to local priorities, is more likely to be
sustainable. And it makes sense. Local and national actors have more
relevant expertise, and they have long-term commitment to the work in
their communities. Building on this expertise and commitment is good
development and responsible stewardship of taxpayers' money.
There is also some evidence that integrating local knowledge in
program design and funding programs that better match local priorities
can make assistance more effective. But we need to invest more in
evaluation and learning to ensure all programs (not just those led by
local or national actors) are effective, efficient and sustainable. We
need to develop a body of hard evidence, based on rigorous research and
evaluation, about where, when and how localization is the more
effective or efficient way to deliver foreign assistance. I will come
back to this point later.
local capacity strengthening beyond usaid implementation
Localization is not new to U.S. foreign assistance. The most widely
cited example is the President's Emergency Plan for AIDS Relief
(PEPFAR), which has reached a level of 62 percent of funding to local
organizations. While impressive, this example should not be the model
for the future. PEPFAR's efforts, and its 70 percent target for
localization, have focused almost exclusively on ensuring that the
local entities are able to manage USAID- or U.S. Government-funded
projects--in other words, to make them new or substitute implementers
of USG-designed projects. This is not enough to ensure sustainability.
We recognize now that effective localization, that is, localization
most likely to lead to sustainable results, needs to be based on more
than just channeling follow-on projects to local organizations.
Reflecting this recognition, the new USAID Local Strengthening Policy
(https://www.usaid.gov/policy/local-capacity-strengthening) makes clear
the agency's commitment to move beyond just building local USAID
implementers. This policy focuses on strengthening local organizations'
capacities to realize their own priorities and work effectively within
local ecosystems rather than just training them to comply with U.S.
government requirements.
usaid capacity strengthening
Delivering on this vision of localization--a vision for more
sustainable results through U.S. foreign assistance--will require
profound changes in how USAID does business. These changes will take
time and effort.
For example, while much of the conversation regarding localization
focuses on the capacity of local partners (based on the assumption, not
always well founded, that local partners lack the capacity to meet the
administrative requirements mandated by USAID to secure U.S. taxpayer
dollars), not much is said about the capacity USAID needs in order to
channel more assistance to local partners. USAID's staffing shortages,
especially of contracting officers, is a major impediment for the
agency. These shortages not only hinder advances in localization and
working with other new and unconventional partners, they also impede
more robust efforts around monitoring, evaluation and learning (MEL).
That is why Congress must provide much-needed increases in funding for
the agency's Operating Expenses (OE) account. USAID capacity
strengthening requires not just more staff to manage acquisition and
assistance to local entities, likely manifested as smaller and more
numerous projects, but also the capacity to simplify and minimize the
burden of current reporting requirements. USAID is currently
undertaking efforts to do just this--hiring more staff, launching the
burden reduction program, and reviewing and re-launching its Assistance
and Acquisition strategy. These efforts together amount to an ambitious
effort to change how the agency does business and should be recognized
and supported.
risk appetite
Another profound and required change to how USAID does business is
a change in risk appetite. USAID recently launched its new Risk
Appetite Statement, acknowledging that redirecting foreign assistance
can create new risks. Organizations like the one I head, FHI 360
(https://www.fhi360.org/), have decades of experience working for the
U.S. Government in general and USAID in particular. Our processes,
procedures, manuals and staffing profiles are all optimized for
partnering with USAID. Channeling more assistance to partners less
familiar with USAID and U.S. government business processes and
requirements will create new stresses on the agency and the
implementing partner community. It will be important for USAID to
carefully evaluate its experience with early efforts to work with local
entities, such as the 5-year, $300 million Centroamerica Local
initiative that partners with local entities in the Northern Triangle
countries to address the root cause of irregular migration, and
consider lessons learned as it scales up localization--particularly as
the agency launches a similar initiative in Africa.
metrics
I very much appreciate that Administrator Power is specific about
metrics to measure progress on localization. Metrics focus the mind and
create urgency and accountability. But good metrics require good
definitions, and in this case, that means a good metric for
localization requires a good definition of ``local.'' The aid
effectiveness coalition I co-chair, the Modernizing Foreign Assistance
Network (https://www.modernizeaid.net/), is concerned that the
definition of local organization, and thus the measurement methodology
for the localization metric announced by USAID, only considers place of
incorporation, physical address, and place of contract activity. This
methodology is practical because the data are readily available. But
the choice casts too wide a net for what are truly local actors and
motivates international companies--who are still eligible for up to 75
percent of USAID funding--to set up ``locally established partners''
that can crowd out national actors. I will note that USAID's
methodology benefits organizations like mine, but it is not aligned
with the Administrator's vision for localization, and it could limit or
delay localization's expected results around sustainability and
effectiveness. Employing a sharper definition of `local' and using
publicly available data to measure the baseline, and track the
progress, for the 25 percent target is essential to hold USAID
accountable for shifting significant funding to local entities, and
thus to incentivize the necessary culture shift within the agency to
advance these reforms. I draw your attention to recent research by
Publish What You Fund (PWYF) (https://www.publishwhatyoufund.org/),
which proposes an alternate, independently replicable methodology for
measuring the local funding share that employs USAID's own public data.
The baseline estimated using the PWYF methodology for the 10 countries
studied are notably lower than USAID's methodology suggests. A
measurement choice overstating the share of funding going to local
partners severely weakens the impact of Administrator Power's pledge to
commit 25 percent of USAID funding directly to local actors by 2025.
the bigger challenges
The changes I've outlined are challenging but within the power of
USAID. Other changes will be harder (and also take longer) to implement
and are not fully in USAID's control. For example, the budget process--
including the role of directives and the negotiations for allocating
appropriations by country and program--often results in delaying or
obstructing U.S. assistance program responsiveness to country
stakeholder priorities and impeding the ability to adjust to changing
country and program circumstances. Addressing these issues is much more
challenging.
I want to make one final observation to highlight the challenges of
localization. Localization is ultimately about enabling local voices
and local knowledge to influence how development and humanitarian
assistance is allocated. But all too often authoritarian governments
silence the voices of the marginalized populations in the countries we
assist. How our government in general and USAID in particular elevates
local voices has implications far beyond influence on any one
particular program and could exacerbate domestic tensions. This
challenge is not a reason to resist localization, but rather a call to
invest in learning so that we do it well.
conclusion
Localization must be a priority if we value sustainability. It must
be a priority if we want to be responsible stewards of U.S. taxpayers'
money. We need to deeply understand the contexts within which
localization will yield the desired results. I stress again the
importance of sufficient investments in research and evaluation to
learn where, when, and how localization practices and approaches can
shape effective and sustainable outcomes.
______
Article Titled, ``Metrics Matter: How USAID Counts `Local' Will Have a
Big Impact on Funding for Local Partners,'' by Publish What You Fund,
Dated March 2023
______
Prepared Statement of David J. Berteau,
President and CEO of the Professional Services Council
Chairman Cardin and Ranking Member Hagerty: The Professional
Services Council (PSC) \1\ 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) \2\ 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.
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\1\ http://www.pscouncil.org/print_friendly/__p/ca/
Print_Friendly.aspx
\2\ https://www.pscouncil.org/psc/Councils/c/__p/cc/
CID.aspx?hkey=b852cdab-b041-47ed-902d-52026e032e16
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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.'' \3\
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\3\ https://www.usaid.gov/news-information/speeches/nov-4-2021-
administrator-samantha-power-new-vision-global-development
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 \4\ 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.
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\4\ https://www.pscouncil.org/a/Resources/2021/
Perspectives_On_Localization.aspx
https://www.pscouncil.org/a/Resources/2022/Grants_Under_Contract_Help_
Meet_USAID_s_Local_Spending_Goals.aspx
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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.'' \5\
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\5\ https://www.usaid.gov/news-information/speeches/oct-04-2022-
administrator-power-at-the-swearing-in-ceremony-for-counselor-clinton-
white
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.'' \6\
\6\ See footnote 2 above.
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.'' \7\ (emphasis added)
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\7\ https://www.usaid.gov/news-information/congressional-testimony/
jul-14-2021-administrator-samantha-power-fy2022-budget-sfrc
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.
______
Prepared Statement of Allassane Drabo,
Search for Common Ground
Chairman Cardin, Ranking Member Hagerty, distinguished members of
the Senate Foreign Relations Committee, thank you for convening this
timely and important hearing to focus on the challenges, opportunities,
and next steps to ensure that U.S. Foreign Assistance can best support
localization. I commend the Administration and Congress for the
commitment to expanding support to local capacity development and its
partnerships with local institutions.
My name is Allassane Drabo. I was born in Burkina Faso and have
spent most of my life bringing people together, from all backgrounds
and perspectives, to jointly address problems and find locally-led
solutions to the development and political challenges facing our
region. I am currently West Africa Regional Director for Search for
Common Ground, where I lead a team of 250 West African peacebuilders
across Burkina Faso, Mali, Niger, and Nigeria and support partnerships
with dozens of civil society, media, government, faith, and academic
partners. Search for Common Ground is the largest peacebuilding
organization, running locally-led and internationally-networked
programs. We work with USAID through grants, contracts and cooperative
agreements, although the majority of our support comes from other
governments, UN agencies and private donations. My testimony is
informed by my experience at Search for Common Ground and other
organizations in the development sector, as well as the experiences of
my colleagues and partners in the region, but the views I express are
my own.
I am deeply appreciative of U.S. assistance to this region. Every
day, I see the results of efforts that range from urgent responses that
prevent atrocities and upholding human rights amidst the crisis in
Niger, Mali and Burkina Faso, to the decades-long investment that
USAID--and civil society groups like us--have made in supporting the
Nigerian people and institutions as they have transitioned away from
military rule to lay strong foundations for Africa's largest democracy.
I know that external support is most effective when it is informed
by lived experience, and solutions are more sustainable when they are
crafted by those most affected by the problem. USAID's focus on
localization creates an opportunity to radically reshape American
assistance to be even more effective and sustainable, and I welcome the
opportunity to share a few pieces of reflection and recommendations.
putting people & power at the center of assistance
There is no standard definition across government and philanthropic
donors on what is meant by ``localization.'' Here at Search for Common
Ground, we define localization as efforts where people affected by a
problem have power over how (1) priorities are set; (2) programs are
designed and run; (3) resources are allocated; and (4) success is
defined and measured.
Localization must result in more financial investment in
individuals, organizations, and institutions from developing societies.
It also requires better investment, by shifting the processes and
culture of how donors work and relate to the individuals and societies
that they are supporting.
In many places, the development sector has developed complex
international bureaucracies and systems of middlemen, often built
around satisfying donor agencies' procedures and accountability
structures. These are ineffective. Localization efforts that focus on
moving money around--but not shifting accountability structures and
power--risk to simply shift resources from American middlemen to
Nigerian or Malian middlemen, rather than augmenting the power and
agency of the people being served. We have an opportunity to build
efficient and responsive accountability structures.
opportunities to advance further this vision
USAID leadership--both in Washington and in our region--has
prioritized local partnership in improving inclusivity, equity, and
locally-led development. Change requires a detailed and what Americans
might call ``wonky'' approach to systems of strategic planning,
procurement, and accountabilities outside of the funding cycle.
Practical changes--supported by Congress--can further strengthen the
commitment to shift power to local actors.
Local ownership cannot only be top-down and should match more
resources with easier management. There is a tendency in localization
processes to give an overwhelming amount of conversation about who
donors give money to--and this is very important--but must be
accompanied by the structures and approaches that shift how that money
is used and how to the people most affected by the problem are shaping
the solution.
Effective localization means meeting the institutions being
supported ``where they are.'' That means loosening restrictions and red
tape, ensuring adequate staffing for USAID missions, easing two-way
communication, and choosing the right funding modality to fit the work
being done. For different types of projects, in different regions,
localization can look differently: in many places, direct funding for
national civil society organizations is an effective way to invest. But
in others, supporting smaller local organizations to meet rigid federal
standards creates inefficiencies that are hard for the organization to
sustain over time. Sometimes areas, funding an international management
agent to manage passthrough grant funds for local groups is a solution;
in others, supporting direct program implementation with community-
based organizations is more appropriate and effective.
As the world is simultaneously local and global, we need a stronger
definition of local. We know that issues affecting communities are no
longer simply local, but spillover effects are regional and even
global. As such, there is still a strong need for regional or cross-
national interventions at a systems level. There is a place for a
variety of business approaches to support locally-led development.
We suggest that local civil society needs to be recognized
in all of its complexities, including international civil
society--where it is locally embedded--with a focus on
equitable resourcing. A locally-established office of an
international organization comprising of 100 percent local
staff with local leadership demonstrates a long term commitment
that a 5-year pop-up project office--or one where leadership is
foreign and locals are ``support staff' does not.
There is an opportunity to elevate regional or south-south
capacities, which is largely missing from the local capacity
building policy. For example, a well-resourced Nigerian civil
society organization building its capacity to work in the Sahel
is a strong example of local capacity development that embeds
decision making and leadership in the region.
Consultations to inform design are important, and ongoing follow-up
is critical. Capturing and integrating different perspectives means
listening to and hearing a diversity of local voices. Receiving
conflicting perspectives can be overwhelming and lead to the assumption
that progress is impossible without agreement. But what I have found is
that different perspectives help us to see the multiple sides of an
issue and uncover diverse existing forces for change. Through the
hundreds of programs I have worked on in my career, I see that the more
people are involved in a design process, the richer the program.
This also requires robust communication to the public, to non-
recipient organizations outside of the grant cycles. USAID missions as
well as Congressional Delegations and other officials could adopt a
culture of public communications about their priorities and plans. This
should engage more public reporting and open dialogue, not only with
grantee or partner organizations, but with the wider community of
stakeholders.
Measure for impact simply, consistently and comparably. In highly
dynamic and fragile environments, we have begun to use the Peace Impact
Framework, which contains just 1O simple indicators and is increasingly
accepted by multiple donors, civil society groups and national
government institutions to simplify reporting and measure collective
impact. We have also started using much more locally-embedded models
for measuring impact such as the Grounded Accountability Model, engages
communities at the core of the problem and allows them to define
everyday indicators of key concepts (such as peace, empowerment,
justice) that guide the program, and our Embedded Observer Approach
piloted this in South Sudan and eastern Democratic Republic of Congo,
two locations that are volatile and hard to access. We identify and
coach people within the communities to identify conflict issues, give
them a smartphone, and we have a form for them to send information back
to Search every week. This is data that we can use against our simple
measurement structure.
Procurement changes are vital. In procurement processes, USAID
needs to undertake a procurement review and reform process to:
Review the use of Cooperative Agreements vs. Grants among
assistance awards. While Cooperative Agreements are appropriate
to highly sensitive and coordinated projects, they place a
higher burden on both USAID and recipient staff and can exclude
some organizations.
Reduce the administrative burden to local direct recipients
of USG funding and increase the number of direct local entities
and locally-established recipients rather than only 'passing
through' local funding through U.S. implementers. That should
include encouraging applications supporting non-American
grantees, sub-grantees to establish Negotiated Indirect Cost
Rate Agreements within their awards to adequately reflect
costs.
Review and eliminate the ``Chief of Party'' and other key
personnel staffing model which largely exclude the opportunity
for representative local leadership. USAID should consider
eliminating proposal evaluation criteria that incentivize
highly-compensated non-local staff, and study how other donors
ensure competent local staffing without being overly
prescriptive.
Recognize that about half of USAID funds go directly to the
multilateral system in assessed and voluntary contributions.\1\
USAID has little control over the local granting schemes of the
various multilateral agencies, which groups are prioritized,
and whether the funds adhere to strong principles of equity and
diversity at the local level.
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\1\ Congressional Research Service. (Jan 2023) United Nations
Issue: U.S. Funding to the U.N. System.
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Review how risk is assessed. USAID should ask applicants to declare
their funding from outside federal sources in the proposal evaluation
process. USG places a high value on those who are specialized in
receiving USG funds and considers them low-risk entities. However,
other donors take the exact opposite approach and perceive a reliance
on their funds as a high-risk factor because it reduces the ability to
sustain beyond the program cycle. An entity receiving funding from a
local mayor's office or local foundation would likely be considered
high-risk by USAID, but in reality, the non-USAID funds with local ties
ensure sustainability after USAID programming concludes. USAID should
weigh the diversity of an organization's funding sources as a positive
proposal evaluation criteria. Partners with funding from a variety of
donors should be seen as an asset as USAID seeks to develop diverse
capacities and strengthen a diverse coalition of actors. USAID should
incorporate a ``value for money'' methodology in the evaluation of cost
proposals where financial proposals are evaluated based on efficiency,
economy, efficacy and equity. Methods for approaching capacity building
and the ways in which money moves are inevitably different and vary
from sector to sector. It is appropriate for USAID to be differential
in the evaluation of partners across industries and issue areas;
however, USAID should review financial proposals and operational
structures through a value for money lens that emphasizes equity.
USAID has set forth that they envision ``expanding the share of its
programs that are locally led, in which a diverse group of local actors
define priorities, design projects, drive implementation, measure and
evaluate results, and more fully own and sustain efforts to save lives,
reduce poverty, strengthen democratic governance, reduce corruption,
address climate change, work to prevent conflicts, respond to global
pandemics, and emerge from humanitarian crises.'' \2\
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\2\ USAID (Aug 2022). Localization at USAID: The Vision and
Approach. https://www.usaid.gov/sites/default/files/2022-12/
USAIDs_Localization_Vision-508.pdf.
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recommendations
We encourage the U.S. Congress to support USAID and monitor
progress against the goal of greater local agency and good stewardship
of U.S. taxpayer funds allocated to development programming through the
following ways:
Continue robust dialogue between Congress and USAID on
reforms to procurement and reporting, to reduce barriers to
local partnership. Congress can look for statistics on the
number of women, young people, and national staff in leadership
positions for USAID programs and how evaluation criteria for
awards prioritize diversity and locally-led development.
Congress can continue the dialogue that is beginning here
between implementers, USAID staff and Congressional experts to
sustain energy and focus on the myriad of specific policy
changes.
Ensure that the definitions of ``local'' submitted by the
USAID Administrator in the Localization Report takes the full
civic architecture into account. This may include underutilized
partners, locally registered entities, as well as locally
established partners that are fully local and embedded branches
tied to regional and global structures. Congress reporting by
USAID of how many local entities they already directly and
indirectly support financially through their awards can take of
how many local entities are benefiting from USAID money through
current awards and understand the diversity of those entities.
Provide resources towards development assistance that
fosters innovation. We know that change takes a generation.
Yet, within USAID's long-term commitments to developing
contexts, testing programming approaches and models is really
important, especially in fragile or fast moving contexts. We
need to understand what works, where, and why. We support long-
term funding commitments that allow for innovation and testing
a wide range of approaches.
Invest in research and development that improves USAID
support to local actors and affected communities. Allocate
funding towards improving the systems of research, learning,
and adaptation that best support locally-led development.
Invest in peacebuilding and development ``R&D'' and require an
Impact Framework to report on critical measures of success or
failure in terms of levels of violence, polarization,
institutional legitimacy, and human agency and which can be
shared with other donors, national institutions, and civic
groups to streamline reporting. Support initiatives to build
the evidence base, break down silos of information, and expand
learning and cross-fertilization.
Ensure that commitment to localization is adequately
resourced and integrated into other USAID strategies submitted
for congressional review, such as Women, Peace, and Security
and Global Fragility Act country and regional plans. Ensure
that these plans mandate moments of meaningful reflection with
local actors and create incentives and safety for implementers
to share in a transparent manner lessons learned and best
practices.
[all]