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ANNEX 5
GUIDANCE ON CONSULTATION AND AVOIDANCE OF UNFAIR COMPETITIVE ADVANTAGE
A. USAID ENCOURAGES PARTICIPATION AND CONSULTATION
USAID policies require and encourage wide participation by and consultation with other entities involved in development, both our partners and our customers--whether host country citizens, governments, NGOs, PVOs, for-profits, or other donor organizations. Discussions with individuals and organizations concerning basic strategies do not raise organizational conflict of interest issues. Nor is there an issue when discussions of specific developmental problems include specific possible activities for solving the problems. The following are examples of activities that are encouraged by current policies.
EXAMPLE 1: NGOs and others are invited to participate in a discussion of the New Partnerships Initiative ("NPI").
EXAMPLE 2: Mission staff holds a series of meetings with NGOs on how best to implement a USAID Mission's Strategic Objective on child survival.
EXAMPLE 3: Mission solicits written views from NGOs on potential activities that could be undertaken under a strategic objective.
B. GUIDANCE ON EXTERNAL PARTICIPATION IN STRATEGIC PLANNING AND IMPLEMENTATION
At the outset of preparing a new strategic plan, or amending an existing one, the mission forms an internal strategic planning team to manage the process. The mission then sponsors seminars and public meetings in the host country, and, working with USAID/W, also obtains input through meetings and consultations involving PVOs, NGOs and consulting firms. Based on this input and other infor-mation and analysis, the strategic planning team prepares the plan for USAID/W approval.
Once a plan is approved, the mission begins the implementation of the individual strategic objectives. For each objective, a strategic objective (S.O.) team is established with the responsibility for managing to achieve that objective.
* This draft document has been substantially revised since its initial distribution at the June 21 meeting of the Advisory Committee on Voluntary Foreign Aid (ACVFA), and will serve as the basis for further consultation with our development partners.
Initially, the S.O. team includes mission staff relevant to implementing the objec-tive, and this internal group forms the core S.O. team. It is then the responsibility of that core team to identify external S.O. team members from counterpart host-country government agencies, the private sector, PVOs/NGOs, customer representatives, and/or other donors. External S.O. team member selection is based on a number of criteria: local knowledge, specialized skills, relevant experience, role in achieving the strategic objective, etc. Members may represent existing contractors or grantees, potential contractors or grantees, organizations which have no existing or expected contractual relationship with USAID, host country participants, etc.
Members will be expected to discuss all aspects of whatever is needed to achieve the objective. This may include ideas about new activities and progress of existing activities, as well as review of overall progress in meeting the objective. With the possible exception of host country counterpart organizations, external S.O. team members play no role in writing specific statements of work for activities. However, they may serve on technical evaluation panels for contracts and agreements if not barred because of personal or institutional associations with grantees or contractors competing for award under the specific activity. Given this structure, it is likely that unsolicited proposals from S.O. team members will not be entertained by USAID because of their position on the team and the resulting advance knowledge they will have about possible activities.
C. ADDITIONAL GUIDANCE ON PARTICIPATION AND ADDRESSING CONFLICT OF INTEREST CONCERNS
The following guidelines will help to avoid problems:
1. CONSULT EARLY AND INDEPENDENTLY ASSESS. One of the ways to mitigate any issue of unfair competitive advantage is for USAID to demonstrate that the information or advice provided by potential grantees and contractors has been independently considered by USAID in coming to a decision. In order for that to happen the information or views provided by potential bidders must be received early in the process so that USAID can consider it fully and carefully and demonstrate that it made an independent decision.
2. DOCUMENT S.O. TEAM DISCUSSIONS ABOUT PROPOSED ACTIVITIES. It should be noted that technically the involvement of more than one organization in the development of an activity exempts those organizations from the requirement that they be precluded from competing for a related procurement action. However, other organizations not part of the S.O. team can still claim that an unfair competitive advantage was gained, and effective mitigation may be difficult when involvement has been in the form of oral discussions. Documented discussions allow the mission to demonstrate independent action.
3. PUBLICIZE AS WIDELY AS PRACTICABLE. Present general briefings to a wide audience of potential partners and customers, and systematically obtain feedback through such public fora.
4. MAKE INFORMATION ON SPECIFIC COMPETITIONS AVAILABLE to ALL potential implementers as early as possible in the process. One of the principal ways to avoid accusations of unfair competitive advantage is to make sure that information is available to all, in a timely manner, and well before the procurement process begins.
D. THE FEDERAL ADVISORY COMMITTEE ACT
The Federal Advisory Committee Act (FACA) does not apply to all advisory committees. It does not apply to committees which are established overseas and include non-U.S. citizens. Another exception is where the agency is seeking the views of individuals, as opposed to consensus advice or recommendations. There is no exception for one-time meetings. However with respect to U.S.-based advisory committees, FACA and regulations require that certain "advisory committees" be chartered, approved by OMB and GSA, give notice of meetings and comply with other procedural requirements. An "advisory committee" under FACA is any group not composed entirely of full-time Federal employees.
The following guidance is provided on the use of advisory committees:
EXAMPLE 1: In country X, a mission has a series of meetings with a group to seek consensus on a strategic objective. The group includes non-U.S. citizens as members, e.g. host government officials or representatives of local NGOs. FACA does not apply even if at some of the meetings only U.S. citizens are in attendance.
EXAMPLE 2: In USAID/W, the G bureau establishes a group consisting of ten USAID employees and one outside technical advisor to advise the bureau on implementation of a population research project. FACA applies unless the bureau makes it clear in the terms of reference establishing the group that only individual views are being sought.
EXAMPLE 3: In USAID/W, the G bureau is preparing a strategic plan in a specific area. As part of the effort to include partners and customers in the planning process, USAID staff can host meetings to solicit individual views of customers and partners. USAID staff makes final decisions about the definition of the objective. Once the objective is approved, the G bureau establishes an S.O. team initially consisting of a core group of USAID employees. As contracts and grants are negotiated, representatives of the relevant organizations, based on the terms of the contracts and grants, will participate as external members of the S.O. team. However, external S.O. team members will play no role in writing specific statements of work for planned activities.
Note: It is recommended that we seek a waiver of FACA, in our status as a reinvention lab Agency, to permit team operations in USAID/W as we expect them to operate overseas, i.e., to allow individuals from organizations with which we do not have contractual arrangements to participate on S.O. teams.
EXAMPLE 4: The Office of Procurement holds a series of "town meetings" with USAID contractors to get their views on a variety of procurement issues. The meetings are publicly announced well in advance, and anyone may attend and speak. FACA does not apply because consensus advice is not being sought.
E. AVOIDING OR MITIGATING ISSUES OF UNFAIR COMPETITIVE ADVANTAGE.
1. AVOIDING CONFLICTS OF INTEREST. While the Agency encourages the broadest possible participation appropriate to a particular situation, some actions require caution in order to ensure a basic standard of fairness. The concern is to balance the need to make maximum use of the development knowledge, experience, and skills possessed by customers and partners in order to achieve development results and meet U.S. foreign assistance objectives, while ensuring that no potential implementers of USAID programs gain an unfair advantage as a result of engaging in consultation. It is in connection with the design of specific activities that conflicts occur, whether it is a case of an organization's looking out for its own interests and designing towards its own strengths, or obtaining privileged information. The USAID rules are very strict on precluding potential contractors who have had substantive involvement in design work for a specific activity from the implementation of that activity. Even providing material that leads directly and predictably to a work statement is grounds for being precluded from competing. Only very preliminary and general design work not foreseeable connected to particular activities is permissible. Even though involving more than one organization can help to eliminate these potential conflicts, there is still the possibility that a potential contractor will protest that the consultations were unfair in some respect, especially when mitigation is difficult because contractor involve-ment has been in the form of oral discussions only. Consultation with potential contractors regarding the content of the Scope of Work for a specific activity should be avoided to minimize any complaints of conflicts and the Contracting Officer should be consulted before any consultation at the design stage for a specific activity takes place.
EXAMPLE: Mission S.O. Team members are about to begin writing a Scope of Work for a contract and would like to meet with a number of NGOs, customers and others. After consulting with the Contracting Officer, the team decides that: (i) oral discussion will be held only with end-users and others who will not be bidding; and (ii) potential bidders will be consulted only on specific issues and only in writing.
2. PROCUREMENT INTEGRITY. Procurement integrity legislation imposes limitations on actions that may be undertaken during the course of a procurement. From the time an identifiable action is taken to start a procurement (such as drafting a statement of work) until the contract is awarded or a work order is finalized, proprietary and source selection information (as described in the Federal Acquisition Regulation 3.104-4) may not be released without the approval of the Contracting Officer. Moreover, Agency officials involved with that procurement may not, among other things, speak with potential contractors about business or employment opportunities without approval of the GC Ethics Counsel.
3. ORGANIZATIONAL CONFLICTS OF INTEREST. Policies on organizational conflict of interest are set out in the Federal Acquisition Regulation, Subpart 9.5 and in Contract Information Bulletin (CIB) 94-2 and its Supplement. The pertinent provisions are discussed briefly here. If an organization designs an activity or develops material that leads directly and predictably to a statement of work for a contract (regardless of whether the work is done under a contract or assistance instrument), that organization may not, with a few limited exceptions, compete for the implementation contract, either as a prime or sub-contractor. Organizations may conduct underlying studies or assessments that are used by USAID in devel-oping a proposed activity without being automatically precluded from participation in the implementation phase by virtue of having done so. A contracting officer is also required to determine whether potential conflicts of interest exist at the time of the implementation procurement and to take appropriate actions to mitigate any conflicts that are found. An organization that has done predesign work might, therefore, still be found to have a potential conflict that must be mitigated at the time the implementation contract is being awarded.
We do not at this time have regulations covering organizational conflicts of interest under assistance agreements; however, the issue needs to be considered when Requests for Applications (RFAs) are issued for competitive assistance awards. If an activity that has been designed by one recipient under a USAID assistance agreement will be implemented through another assistance agreement rather than a contract, it will be necessary for the Agreement Officer (Contract Officer) and the Technical Officer to decide whether a non-competitive award to the design organization is appropriate and justifiable. If the implementation award will be competed, it will be necessary for the Agreement Officer to determine whether any actions should be taken to mitigate the potentially unfair advantage of the design organization. If more than one recipient organization works on develop-ment of an activity for which USAID then issues an RFA, the design organizations would not be precluded from competing, nor would the Agreement Officer need to mitigate any unfair advantage beyond assuring that pertinent information is made available to interested organizations.
4. RESOLVING PROBLEMS ARISING FROM CONFLICTS OF INTEREST & UNFAIR COMPETITIVE ADVANTAGE. "Throwing out" a potential bidder or recipient from bidding is not the only way to resolve an unfair competitive advan-tage. There are many other ways to both avoid the creation of an unfair advantage and mitigate one once it exists without having to resort to the most drastic option of precluding someone from competing. In certain circumstances, however, preclusion from competition is the only option unless a waiver is authorized (see CIB 94-2).
Point of Contact: Questions concerning this notice may be addressed to Kathleen O'Hara, M/OP/P, 703-875-1534; questions on the Federal Advisory Committee Act may be addressed to Carolyn Karr, GC/BHR, 647-8416.
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Last Updated on: December 22, 2000 |
