Public-Private Partnerships (PPPs) are collaborations between government agencies and non-federal partners, designed to achieve shared objectives through mutually determined structures and responsibilities. These partnerships, formalized through non-legally binding agreements, are increasingly vital for enhancing the impact of public initiatives. This guide provides a detailed overview of PPPs, drawing from official guidelines to ensure effective and compliant collaborations.
The Essence of Public-Private Partnerships
At its core, a Public-Private Partnership is a strategic alliance where both public and private entities contribute resources and expertise to achieve common goals. The foundation of any successful PPP rests on several key principles:
- Shared Objectives: PPPs are initiated when both the government and a non-federal partner identify a common objective they wish to pursue collaboratively.
- Enhanced Impact through Resource Sharing: By pooling resources—financial, human, and technological—PPPs can amplify the impact of individual efforts, achieving more than either party could alone.
- Improved Reputation and Visibility: Collaboration can enhance the visibility and reputation of programmatic initiatives, demonstrating a united front and broader support.
- Mutual Programmatic Goals: PPPs are structured to achieve programmatic goals that are mutually beneficial and aligned with the strategic interests of all partners.
The fundamental principle guiding federal agencies in pursuing PPPs is the demonstrable increase in effectiveness and efficiency through partnership. Resources allocated, including staff time, must directly serve the agency’s statutory purposes more effectively than alternative approaches.
Navigating the Framework of Public-Private Partnerships
To ensure that PPPs align with the Department’s interests and maintain governmental integrity, specific guidelines must be followed. These guidelines are designed to prevent impropriety and ensure due diligence in all partnership endeavors.
Scope and Limitations
It’s critical to understand what PPPs are and, equally importantly, what they are not. PPPs are not vehicles for:
- Contracting Services: PPPs should not be used to circumvent federal procurement laws for acquiring services, staff, facilities, or goods that primarily benefit the government directly. Such relationships fall under federal procurement law and the Federal Acquisition Regulation (FAR).
- Transferring Funds or Principal-Agent Relationships: PPPs are not alternatives to grants or cooperative agreements for transferring funds to external entities or establishing principal-agent relationships.
For clarity on these distinctions, consulting with bureau legal counsel is essential. Bureaus bear the responsibility of securing senior official approval before pursuing any partnership initiative, with final approval for specific partners resting with the Under Secretary for Management, unless delegated in writing.
Authorities Governing PPPs
The establishment and operation of PPPs are grounded in various legal authorities, ensuring they are conducted within a lawful and regulated framework. Key authorities include:
- General Authorities of the Secretary of State: For foreign relations and departmental management (22 U.S.C. 2651a).
- Foreign Assistance Act of 1961: As amended (22 U.S.C. 2151et seq.).
- Mutual Educational and Cultural Exchange Act of 1961: As amended (22 U.S.C. 2451 et seq.).
- United States Information and Educational Exchange Act of 1948: As amended (22 U.S.C. 1431 et seq.).
- The U.S. Leadership against HIV/AIDS, Tuberculosis, and Malaria Act of 2003: (22 U.S.C. 7601et seq.).
- Migration and Refugee Assistance: (22 U.S.C. 2601et seq.).
- Delegation of Authority No. 514: Dated April 20, 2021.
- Case-Zablocki Act: As amended (1 U.S.C. 112b).
- Other relevant authorities.
These authorities provide the legal basis for the Department’s engagement in PPPs, ensuring all activities are conducted with proper legal footing.
Legal Considerations and Potential Issues
Engaging in PPPs requires awareness of potential legal and ethical issues that could restrict or complicate partnership activities. Key concerns include:
- Conflict of Interest: U.S.C. 208 and ethics regulations (5 CFR 2635) prohibit employees from official involvement in matters affecting entities with which they have outside economic or personal relationships. These regulations also address inappropriate endorsements and misuse of official positions, guiding the Department’s policy on partner appropriateness and partnership terms.
- Federal Advisory Committee Act (FACA): While generally not applicable to most PPPs focused on operations rather than advice, FACA (5 U.S.C. 1001 et seq.) may become relevant if a partnership is designed to provide formal advice or recommendations to the Department. Understanding FACA is crucial to avoid unintended compliance burdens.
- Government Corporation Control Act (GCCA): GCCA (31 U.S.C. 9102) prevents federal agencies from creating or acquiring corporations as government instrumentalities without explicit legal authorization. If a PPP involves creating or acquiring a corporation or legal entity, a GCCA review by the Office of the Legal Adviser is necessary.
Other laws, such as the Paperwork Reduction Act, may also impact partnership activities, necessitating careful legal review and consultation.
Defining Key Terms
Clarity in terminology is essential for effective partnership management. Within the context of PPP guidelines:
- Employee: Refers to any appointed officer or employee of the Department, including local staff, special government employees, experts, and consultants.
- Nonfederal Entity: Encompasses a broad range of public, private, commercial, and nonprofit entities, including corporations, civil society organizations, foundations, academic institutions, and domestic state, tribal, or local governments. Notably, domestic entities receiving congressional appropriations (e.g., Kennedy Center, Smithsonian Institution) are not considered non-federal entities in this context. Foreign quasi-governmental entities not performing governmental functions, such as public universities, are classified as non-federal entities.
Procedure for Establishing Public-Private Partnerships
A structured procedure ensures that PPPs are established thoughtfully, with due diligence, and in alignment with departmental goals.
Evaluating Suitability and Necessity
The initial step involves assessing whether a PPP is the most suitable approach. Partnerships are appropriate when they:
- Advance specific Department goals more effectively by leveraging external resources or expertise.
- Are more efficient than working alone or solely with other U.S. government offices.
- Address issues that benefit from contributions and participation from outside the U.S. government.
- Align with available nonfederal assets and interest in collaboration.
- Are supported by the Department’s commitment of staff, time, and funding.
Conversely, PPPs may not be suitable when:
- Potential partners lack sufficient interest or commitment.
- Resources to support the partnership are insufficient.
- Potential partners have a history of non-cooperation.
- The necessity of leveraging private sector resources is unclear.
- The Department can achieve its goals more effectively independently.
- The partnership duplicates existing agreements or entails responsibility for U.S. government operations.
- The primary purpose is to facilitate a gift to the Department.
A crucial early step is consulting with the bureau’s legal office to confirm the activity’s authorization.
Due Diligence: Identifying and Vetting Partners
Once a PPP is deemed appropriate and authorized, the process of identifying and vetting potential partners begins. This involves:
- Broad Search: Conducting a wide search for potential partners to avoid the appearance of favoring any single entity.
- Objective Criteria: Establishing written, neutral criteria for identifying ideal partner qualities.
- Convening Organizations: Engaging with trade associations or affinity groups to broaden the search and mitigate preference issues.
- Goal Alignment: Assessing potential partners’ goals and objectives for overlap with Department goals.
- Resource and Expertise Verification: Ensuring potential partners possess the necessary resources and expertise.
- Due Diligence Memorandum: Obtaining a due diligence informational memorandum from E/GP for all potential nonfederal entities.
- Risk Assessment: Reviewing the memorandum to judge whether partnering would cause harm or embarrassment to the Department.
- Conflict of Interest Evaluation: Assessing potential conflicts of interest that could compromise objectivity.
Partner Approval Process
Formal partner approval is a multi-step process culminating in Under Secretary approval. Key steps include:
- Bureau Approval: The bureau must approve the underlying initiative and concur with partner selection.
- Action Memorandum: Preparing a detailed action memorandum to the Under Secretary, including:
- Partnership description and goals.
- List of potential partners and risk information.
- Respective roles of the Department and partners.
- Funding details.
- Importance to the U.S. government.
- Anticipated duration.
- Bureau initiative approval assertion.
- Partner selection rationale.
- Solicitation plans, if any.
- Draft Memorandum of Understanding (MOU).
- Clearances: Obtaining clearances from the Office of the Legal Adviser (including L/M, L/EFD, and relevant L offices), E/GP, R, and other pertinent offices.
- Under Secretary Review: The Under Secretary evaluates factors such as:
- Potential business or benefit seeking by the partner.
- Partner operations regulated by the Department.
- Partner interests affected by official duties.
- Appearance of advantage-seeking.
- Major non-routine business with the Department.
- Reputational risks.
Partnership requests are generally denied if impartiality is questionable. The requesting office is responsible for providing comprehensive information to facilitate the Under Secretary’s decision.
Memorandum of Understanding (MOU)
Once partners are approved, finalizing a Memorandum of Understanding (MOU) is the next step. This involves:
- MOU Finalization: Detailing the partnership’s scope, objectives, and partner roles.
- Approval of Terms: Seeking approval of the MOU terms from the relevant chief of mission, senior bureau official, or designee, with legal clearance.
- Template Usage: Utilizing the provided MOU template as a guide.
- Commencement of Activities: Initiating authorized activities after MOU approval and signature by an authorized official (typically an Assistant Secretary, equivalent, or Chief of Mission).
- Amendment Clearance: Ensuring legal clearance for any MOU edits, with substantive changes potentially requiring further Under Secretary review.
Short-Term Partnerships and Co-Hosted Events
For collaborations intended for short-term events like receptions, meetings, or conferences, a streamlined process exists for “short-term partnerships” or “co-hosted events.” These are generally collaborations lasting a few days for information dissemination and exchange.
Key aspects of short-term partnerships include:
- Decentralized Approval: Chiefs of mission or senior bureau officials can authorize short-term partnerships without Under Secretary pre-approval.
- Due Diligence and Criteria: Approving officials must apply the same partner evaluation criteria as the Under Secretary. Bureaus conduct due diligence in consultation with E/GP.
- High-Profile Event Exception: “High-profile events,” identified by senior officials in consultation with E/GP as posing significant reputational risk, still require Under Secretary approval, even if short-term.
Ongoing Implementation and Adaptability
Partnerships are dynamic and may evolve, often involving additional partners over time. Ongoing management includes:
- Legal Review: Regular legal review to address evolving legal and ethical considerations, ensuring continued compliance.
- Scope Adherence: Maintaining partnership activities within the scope of initial approvals, seeking legal guidance for activities outside this scope.
- Gift Solicitation Compliance: Following gift solicitation guidelines (2 FAM 960) if the Department or partners intend to solicit gifts for partnership activities, often requiring Under Secretary authorization.
- Monitoring and Review: Bureaus and missions review E/GP alerts regarding negative news about partner entities, assessing partnership continuation in light of reputational risks.
- Renewal Process: Renewing partnerships beyond their initial duration requires Under Secretary re-approval, including updated due diligence.
- Adding New Partners: Adding partners to existing PPPs necessitates following the standard partner approval process, including due diligence and Under Secretary approval.
Reporting and Accountability
Comprehensive reporting ensures transparency and facilitates learning and improvement in PPP practices. Key reporting responsibilities include:
- Annual Data Call: Bureaus, offices, and missions respond to an annual partnership data call administered by E/GP, enabling:
- Learning from past experiences.
- Sharing best practices.
- Responding to inquiries effectively.
- Informing Department leadership.
- Case Act Compliance: Compliance with the Case Act (1 U.S.C. 112b) is required for PPPs involving foreign entities, particularly those affecting U.S. rights or requiring legal changes. This may involve transmitting MOUs to relevant offices for congressional reporting.
Conclusion
Public-Private Partnerships are a powerful mechanism for the Department to extend its reach and amplify its impact by collaborating with non-federal entities. Adhering to these guidelines ensures that these partnerships are formed and managed effectively, ethically, and legally, maximizing their potential while safeguarding the Department’s interests and reputation. By embracing a structured approach to PPPs, the Department can continue to foster valuable collaborations that advance shared objectives and serve the public good.
