How identity numbers have caused chaos for USAID overseas partners

In April, the United States switched to a new system of identity numbers for organizations that want to receive funding from the U.S. government. But the problems with the system meant large numbers of organizations found themselves barred from participating in bids or unable to get paid for work already done. NGO campaigners say the worst hit have been small, local organizations overseas — the exact type of organization the U.S. Agency for International Development is trying to do more business with. And USAID itself said that many potential partners had simply given up on working with the agency as a result of the process. Now, after months of chaos and continued lobbying, USAID has issued a directive that should allow those organizations to continue to win USAID grants and contracts while issues with the transfer to the new system are resolved. The background information included in the directive takes an unusually critical stance toward those administering the process and the difficulties caused for USAID partners. The move from DUNS to UEI The problem started with a shift to what is called a unique entity identifier, a 12-digit alphanumeric key used to identify organizations on SAM.gov, the portal on which U.S. government contracts and grants are listed. Entities must have a number before they can apply for grants or be included in contract bids. The U.S. government previously used the DUNS system — provided by international analytics company Dun & Bradstreet — which is widely used around the world, including by the European Union and the United Nations, whereas UEIs are unique to the U.S. The General Services Administration, the agency responsible for the transition, promised the move would be seamless for organizations that had DUNS numbers already — but this proved not to be the case. And organizations registering for the first time have struggled to get into the system at all. At one stage, those watching the process say there was a backlog of 30,000 organizations waiting for a UEI. USAID said its experience was that foreign partners took four months to complete the process. Previously, USAID allowed agreement officers a 30-day window to allow organizations without a UEI to access assistance funding — which includes grants and co-operative agreements, but excludes contracts. But the recent directive, issued on Sept. 26, says that until the end of January 2023, awardees must only show they have started the process of registering and that they are doing everything they can to complete it. Nevertheless, the issue has not completely gone away. Similar exemptions have not been universally issued for organizations doing business with other U.S. agencies, such as the Department of State. USAID’s critical stance USAID has made clear its dissatisfaction with the process and used the background to the directive to highlight several ways in which the previous system had been more effective. It said the new system required documents to be translated into English and said that the new system had “challenging operating parameters.” The directive said that under the DUNS system, foreign vendors had been able to engage in several different languages with Dun & Bradstreet offices around the world. “Dun & Bradstreet had foreign language capabilities to dialogue with foreign vendors and had compiled decades of historical data on entities that expedited the validation process,” the directive said. “With the April 2022 shift to the UEI generated by SAM, all support and communications are now routed through the U.S.-based Federal Service Desk (FSD). The help desk support has no foreign language support capabilities, does not have locations or operating hours that are convenient for USAID’s overseas partners, and does not have a toll-free international phone number. “Many of USAID’s overseas offices report that potential local partners are discouraged from submitting an offer or application due to registration and communications difficulties, or simply unable to complete the registration process.” Negative impacts Cynthia Smith, director of government affairs and advocacy at Humentum — which supports NGOs to strengthen their operating models — says the lack of a UEI has caused dozens of international organizations to be disqualified from many millions of dollars of lucrative international contracts. “This has had a serious negative impact on the localization agenda because the entities most at risk and most affected have been those which are new and local and weren’t on the system,” she said. “We’ve had many accounts of our members facing negative monetary impacts.” Smith said that while USAID had now addressed these issues, this did not solve all the problems for those trying to do business with the U.S. government. She said that agencies such as the Centers for Disease Control and Prevention and the Department of State have still not issued similar guidance to their own grant and contract officers, meaning that different organizations are receiving different treatment at the discretion of the individuals involved. “State hasn’t centralized any of these processes and policies,” she said. “It hasn’t got the same infrastructure to deal with this.” Smith also expressed skepticism that the issue would be resolved by USAID’s deadline of the end of January. That means that if the problems persist into next year, smaller organizations could face more months in limbo.