II 118th CONGRESS 2d Session S. 3994 IN THE SENATE OF THE UNITED STATES March 20, 2024 Mr. Coons (for himself, Ms. Ernst , Mr. Kaine , and Mr. Ricketts ) introduced the following bill; which was read twice and referred to the Committee on Foreign Relations A BILL To authorize and encourage the United States Agency for International Development to pursue a model of locally led development and humanitarian response and expanded engagement with local partners and to increase its local partner base.

1. Short title This Act may be cited as the Locally Led Development and Humanitarian Response Act . 2. Purpose The purpose of this Act is to encourage USAID to pursue a model of locally led development and humanitarian response and expanded engagement and partnership with local entities. 3. Sense of Congress It is the sense of Congress that— (1) locally led development and humanitarian response— (A) is more equitable and inclusive; (B) is linked to more efficient and sustainable development and humanitarian outcomes; and (C) is vital to building long-term self-reliance; (2) over multiple presidential administrations, USAID has sought to achieve greater development outcomes through stronger local partnerships, including through Country Ownership , The Journey to Self-Reliance , and Locally Led Development ; (3) USAID should increase direct funding to local entities, including by increasing the amount of development and humanitarian assistance to such entities; (4) USAID should ensure its programming enables local communities to exercise leadership over priorities, project design, implementation, and measuring and evaluating results of such programs; (5) working with local partners often requires more time and resources than traditional partners, including extended availability of funds and additional staff resources; and (6) increased flexibility is critical to enable USAID to respond to local priorities and leverage local capacities, including with respect to staffing, availability of funds, program design, and acquisition and assistance processes. 4. Definitions In this Act: (1) Appropriate congressional committees The term appropriate congressional committees means— (A) the Committee on Foreign Relations of the Senate ; (B) the Committee on Appropriations of the Senate ; (C) the Committee on Foreign Affairs of the House of Representatives ; and (D) the Committee on Appropriations of the House of Representatives . (2) NICRA The term NICRA means Negotiated Indirect Cost Rate. (3) USAID The term USAID means the United States Agency for International Development. 5. Working with local partners The Administrator of USAID should, to the extent feasible and appropriate, localize the USAID partner base by— (1) simplifying and increasing access to USAID resources for local partners in humanitarian and development sectors, including local partners who have relations, agency, or power structures in place that produced, or can produce, strong trust, accountability, and legitimacy in the communities or networks in which such partners work; (2) diversifying award types to streamline performance requirements and working with the Office of Management and Budget to address threshold constraints, such as fixed amount subaward thresholds, category management award targets, and other thresholds, policies, and contracting incentives that pose a barrier to effectively supporting local partners; (3) streamlining monitoring and evaluation, periodic reporting, and other USAID reporting requirements; (4) ensuring USAID staff are able and encouraged to conduct regular consultation with local partners in local languages of the host countries, making available solicitations for acquisitions and assistance and accepting submissions in local languages, video format, or verbal presentations, including by— (A) investing in translation services; (B) hosting workshop-based engagements; and (C) advertising solicitations in local trade publications, local media including newspapers and radio, local community centers, and local online forums; (5) allowing and promoting multi-year, flexible, tiered, and milestone-based funding for new programs and to bring successful programs to scale; (6) strengthening the capacity of USAID staff and local partners to undertake risk management and mitigation; (7) supporting consistent and unimpeded access to full cost recovery for local partners implementing activities funded by USAID; (8) assessing current definitions of local partner , local ownership , and localization used by USAID for programming and reporting metrics, and updating such definitions, as necessary; (9) undertaking outreach campaigns and engaging with local partners (formally and informally) to raise awareness about opportunities and the process for applying for and managing awards in compliance with applicable Federal regulations and USAID policies, and ensuring such engagement is accessible to all entities, including unregistered and informal organizations; (10) strengthening oversight of capacity strengthening components of awards to ensure United States and international awardees are making good-faith efforts to strengthen local organizations’ capacities, including independent and external evaluations to evaluate the mentorship process and regular feedback loops; (11) expeditiously solving the shortage of contracting officers within USAID, including granting warrants to qualified staff and providing appropriate training; (12) addressing performance evaluation criteria to create greater workforce incentives for USAID personnel to champion locally led development; (13) addressing internal delays and recipient organization issues that result in the required extension of provisional NICRAs, in accordance with section 200.414(g) of title 2, Code of Federal Regulations; (14) conducting NICRA seminars in local languages and providing NICRA documentation in local languages; and (15) ensuring that contracting officers and agreement officers communicate to awardees who do not submit for a NICRA that they are eligible for the de minimis indirect cost rate. 6. Institutionalization of local partnerships Not later than 180 days after the date of the enactment of this Act, the Administrator of USAID shall initiate policy actions, including rulemaking, if necessary, to institutionalize the actions taken pursuant to section 5, to the extent appropriate and feasible, within all relevant USAID internal rules and regulations, including— (1) the Automated Directive System; (2) the Acquisition and Assistance Strategy; (3) the Local Capacity Strengthening Policy; (4) the Localization of Humanitarian Assistance Strategy; (5) the USAID Acquisition Regulation; (6) the Local Systems Framework; and (7) the Private Sector Engagement Policy. 7. Authority to accept applications, proposals, and contracting agreements in local languages and local language support (a) In general Notwithstanding any other provision of law, USAID is authorized to accept applications or proposals in languages other than English if— (1) such acceptance eases the burden of a local entity working with USAID; and (2) USAID staff are able to effectively evaluate such applications or proposals. (b) Local language support (1) In general The Administrator of USAID shall conduct an assessment of options to enable USAID to utilize local languages to support local partners with award solicitations, proposals and applications, evaluations, management, and close out, including advising local partners on applicable United States regulations and USAID policies and local country rules and regulations common in such activities. (2) Report Not later than 1 year after the date of the enactment of this Act, the Administrator of USAID shall submit a report to Congress containing the results of the assessment conducted pursuant to paragraph (1). 8. Modifications relating to the Code of Federal Regulations and other requirements (a) Increase in the de minimis indirect cost The Administrator of USAID is authorized— (1) to increase the de minimis indirect cost rate provided for in section 200.414 of title 2, Code of Federal Regulations, or in any successor regulations, to 15 percent for local entities receiving USAID assistance awards; (2) to establish a similar de minimis indirect cost rate of 15 percent for acquisitions awarded to local entities pursuant to title 48, Code of Federal Regulations; and (3) to further increase such threshold if such action is recommended by regulations promulgated by the Office of Management and Budget. (b) Exemption for local entities The Administrator of USAID is authorized to exempt local entities, as needed, from the reporting requirements under the Federal Funding Accountability and Transparency Act of 2006 ( 31 U.S.C. 6106 note; Public Law 109–282 ) to allow for a 180-day delay in obtaining a unique entity identifier and registration in the System for Award Management if such exemption is not granted later than 30 days before the end of the award’s period of performance. (c) Local competition authority (1) In general Notwithstanding any other provision of law, the Administrator of USAID, or a designee of the Administrator, may award contracts and other acquisition instruments in which competition is limited to local entities if such process would— (A) result in cost savings; (B) strengthen local capacity; or (C) enable USAID to deliver a program or activities more sustainably or quickly than if competition were not so limited. (2) Limitation The authority granted under paragraph (1) may not be used— (A) to make acquisition awards in excess of $25,000,000; or (B) with respect to more than 10 percent of the amounts appropriated to USAID in any fiscal year. (d) Use of national or international generally accepted accounting principles The Administrator of USAID, in consultation with the Administrator of the General Services Administration, the Secretary of Defense, and the Administrator of the National Aeronautics and Space Administration, may permit foreign entities to use national or international generally accepted accounting principles instead of United States Generally Accepted Accounting Principles (GAAP) for contracts or grants awarded under chapter 7 of title 2, Code of Federal Regulations, or chapter 7 of title 48, Code of Federal Regulations. 9. Annual report Not later than 180 days after the last day of each fiscal year, and annually thereafter, the Administrator of USAID shall submit to the appropriate congressional committees and publish on the USAID website a report on the progress made by USAID during the most recently completed fiscal year to advance locally led development and humanitarian response, which shall include, with respect to the reporting period— (1) the amount of funding expended directly or indirectly by local entities, including through all development and humanitarian assistance programs; (2) an assessment of how USAID is enabling more local leadership of programs funded by USAID, including— (A) recipients of direct funding; (B) subrecipients and subcontractors to an international implementing partner; (C) participants in a USAID-funded program; and (D) members of a community affected by a USAID program; (3) an assessment of progress made by USAID towards implementing— (A) the Acquisitions and Assistance Strategy; (B) the Local Capacity Strengthening Policy; (C) the Policy on Locally Led Humanitarian Assistance; and (D) any other relevant strategies and policies; (4) an assessment of— (A) how USAID is using the new authorities granted under sections 7 and 8; and (B) the impact of such authorities on the ability of USAID to work with local partners; and (5) an assessment of— (A) the number of organizations with a NICRA known to USAID that are utilizing provisional NICRAs for longer than 4 years without a final NICRA; and (B) the steps that USAID recommends be taken to reduce the extension of provisional NICRAs beyond 1 year.