Delegation, debarment and waiver powers

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1. The flexibility built into the Act

The Foreign Assistance Act sets many conditions, and then gives the President ways to set some of them aside. Four provisions in Part III of the Act do most of that work. They let the President delegate functions, bar dishonest suppliers, move money between accounts, and in defined cases act without regard to other law. The programs these powers support are described in the military assistance program in the statute.

2. Delegation

"The President may exercise any functions conferred upon him by this chapter through such agency or officer of the United States Government as he shall direct" (22 U.S.C. 2381(a)). The agency head or officer may issue rules and regulations and may delegate further, including, if so specified, a power to redelegate successively to subordinates.

The same section states a preference for private contractors. In providing technical assistance under the Act, the agency head or officer shall use, to the fullest extent practicable, goods and professional and other services from private enterprise on a contract basis (22 U.S.C. 2381(a)). Other federal agencies’ facilities are used in fields such as education, health, housing or agriculture only where they are particularly suitable, not competitive with private enterprise, and available without undue interference with domestic programs.

3. Supplier eligibility and debarment

The President must issue and enforce regulations deciding who may receive funds made available under the Act (22 U.S.C. 2381(b)). A person may be suspended temporarily, pending an investigation and any resulting judicial or debarment proceedings, where there is cause to believe that it or an affiliate has probably engaged in conduct that is a cause for debarment. After an opportunity for a hearing, it may be debarred for an additional period of up to three years.

Three causes for debarment are listed (22 U.S.C. 2381(b)). The first is offering or accepting a bribe or other illegal payment or credit in a transaction financed under the Act. The second is fraud in the procurement or performance of a contract financed under it. The third is any other conduct showing a lack of integrity or honesty in such a transaction.

Reinstatement is on conditions the President sets. "Each person whose eligibility is denied or suspended under this subsection shall, upon request, be entitled to a review of his eligibility not less often than once every two years" (22 U.S.C. 2381(b)).

4. Moving money between accounts

Section 610 allows transfers within the Act’s funding. When the President determines it necessary, up to 10 percent of the funds for any provision may be transferred to and consolidated with the funds for another, subject to listed exceptions (22 U.S.C. 2360(a)). The receiving provision may not be increased by more than 20 percent of the amount made available for it.

Funds notified to Congress for military assistance to a country may also be consolidated with funds notified for development assistance to the same country (22 U.S.C. 2360(c)). The transfer power may not be used to augment administrative expense appropriations (22 U.S.C. 2360(b)).

5. The special waiver authority

Section 614 is the broadest power in the Act. "The President may authorize the furnishing of assistance under this chapter without regard to any provision of this chapter" (22 U.S.C. 2364(a)(1)). The waiver extends to the Arms Export Control Act, laws on receipts and credits, and authorizing and appropriations acts, when the President determines and notifies in writing that doing so is important to the security interests of the United States. A parallel power covers sales, credit and guaranties under the Arms Export Control Act, on a determination that it is vital to the national security interests (22 U.S.C. 2364(a)(2)).

Consultation comes first. Before using the authority, the President must consult with, and give a written policy justification to, the foreign affairs and appropriations committees of both houses (22 U.S.C. 2364(a)(3)).

The power is capped each fiscal year (22 U.S.C. 2364(a)(4)). It may authorize no more than $750,000,000 in sales, no more than $250,000,000 of funds made available under either Act, and no more than $100,000,000 of foreign currencies. No more than $50,000,000 of the funds limit may go to any one country in a year unless that country is a victim of active aggression. No more than $500,000,000 of the combined $1,000,000,000 limit may go to any one country. The authority may not be used to waive the transfer limits in section 610 (22 U.S.C. 2364(a)(5)).

A separate provision allows up to $50,000,000 of the Act’s funds to be used on the President’s certification that it is inadvisable to specify the nature of the use. The chairmen and ranking minority members of the two foreign affairs committees must be fully informed of each use beforehand (22 U.S.C. 2364(c)).

6. Waiving contracting and other laws

A narrower waiver concerns contracting. Whenever the President determines it furthers the Act’s purposes, functions under the Act may be performed without regard to laws regulating the making, performance, amendment or modification of contracts and the expenditure of government funds, as the President specifies. The Renegotiation Act of 1951 is excepted (22 U.S.C. 2393(a)).

Two further waivers follow. Military assistance functions may be performed without regard to specified provisions of the neutrality laws. And Defense Department personnel may be assigned or detailed to any civil office to carry out the Act (22 U.S.C. 2393(b) and 22 U.S.C. 2393(c)).

7. What this means for a contractor

Two points in these sections bear directly on companies. The Act directs that technical assistance use private contractors wherever practicable. And it carries its own debarment regime for bribery, fraud and lack of integrity in financed transactions, with a review available at least every two years. How drawdowns work is covered in drawdowns and peacekeeping assistance.

Key terms

Section 614 waiver	The President’s authority to furnish assistance or make sales without regard to listed laws, within annual caps.
Section 610 transfer	Movement of up to 10 percent of one provision’s funds to another, raising it by no more than 20 percent.
Section 621 debarment	A bar of up to three years on receiving Act funds for bribery, fraud or lack of integrity.
Confidential fund	Up to $50 million usable on certification that specifying its use is inadvisable.

Every statement above links to the document behind it. The full source list for this piece is on the sources page.

This page describes public United States government programs for general information. It is not legal, regulatory or procurement advice, and it does not address the facts of any particular case.

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