Hurdles in Building Public-Private Partnerships

Public-private partnerships are a growing mechanism through which federal agencies deliver services in a wide range of areas, including health, diplomacy, housing, and labor. Partnerships allow agencies to leverage private-sector dollars, in addition to expertise and other resources, to tackle mandates and longstanding issues within their domain. A recommendation published by the Administrative Conference of the United States (ACUS) addresses both legal and practical considerations that agencies face when developing partnerships. As federal agencies continue to face a growth of responsibilities in excess of funding, the ability to enlist private-sector players to help carry out these tasks is an increasingly attractive option. It is not surprising, then, that partnerships have generated an enormous amount of interest in the executive branch over the past decade. For example, in 2011, the National Aeronautics and Space Administration (NASA) partnered with a private corporation called Made in Space, Inc. to facilitate the company’s development of its microgravity 3-D printer. During the first stage of the partnership, NASA allowed the company to use parabolic flights on its spacecraft to test the technology. As the printing technology matured through additional flights, it was eventually accepted for further testing on the International Space Station. More recently, in February 2017, Made in Space used its zero-gravity printing capabilities to successfully print a custom finger splint and ventilator regulator valve on the ISS. This partnership allowed NASA to leverage private-sector expertise to promote its mission, which, in this case, means driving advances in science, technology, aeronautics, and space exploration. Concurrently, the partnership allowed Made in Space to leverage NASA’s expertise and resources to develop a technologically viable product. Partnerships have taken hold in areas beyond development of technology. In the summer of 2018, the Office of Management and Budget (OMB) announced that it intends to establish the Government Effectiveness Advanced Research (GEAR) Center, which it describes as a “public-private partnership that improves mission delivery.” According to a Request for Information OMB recently published, the GEAR Center will initially focus on ways to facilitate commercial use of federal agencies’ data and to reskill the federal workforce. The partnership will offer a way for interventions related to these two areas to be piloted on a small scale outside of government, evaluated by expert private-sector researchers, and then brought back into government depending on their findings. The GEAR Center will help OMB leverage private-sector expertise to promote one of its missions: to improve the efficiency and effectiveness of federal agencies. Agencies must navigate many internal processes to properly establish and participate in a partnership. For example, agency officials carefully vet potential partners for any conflicts of interest or prior misconduct that could reflect poorly on the agency. Agencies also must ensure that their authorizing statutes permit them to engage in activities related to the partnership and that they spend partnership-related funds in a manner consistent with both their appropriations statutes and governmentwide authorities pertaining to grants and procurement. Beyond these core considerations that apply to nearly all partnerships, there is a wide range of additional potential legal issues of which agencies should be aware when considering partnerships. These considerations include: the Paperwork Reduction Act, if the partnership will involve the agency contacting private citizens for information; the Privacy Act, if the agency anticipates coming into possession of personally identifiable information; and the Federal Technology Transfer Act and related legislation, if the agency anticipates the creation of intellectual property during the partnership. Until recently there has been no comprehensive resource capturing the many legal and other considerations federal agencies should take into account when forming and participating in partnerships. ACUS convened the federal government’s foremost experts in partnerships to try to fill this void. In the spring of 2017, dozens of lead partnership officials from 19 federal agencies met at ACUS. The document that emerged from these discussions is called the Guide to Legal Issues Involved in Public-Private Partnerships at the Federal Level. This document covers the major issues agencies can expect to encounter in the formation and operation of partnerships. One major issue that surfaced at a subsequent ACUS meeting, in the summer of 2018, was the potential inefficiencies that often arise when agencies vet potential private partners. In many instances, two parts of a single agency, or two or more agencies, vet the same private entity, which generates inefficiencies for both the agency and the private entity being vetted. Agencies have developed different approaches to prevent such duplication. Some agencies have central vetting units with officers whose exclusive responsibility is to vet proposed private-sector partners and an official who is responsible for approving partnerships for the entire agency. Other agencies lack a central vetting unit and, instead, authorize each of their subdivisions to conduct their own vetting. Some of these agencies are actively developing internal checks to prevent duplication. Internal checks for vetting duplication often involve using software, such as Salesforce, which allows subdivisions of an agency to enter information about potential partners they have vetted so that other subdivisions of the agency can access the information. Thus, even in the absence of a central vetting unit, duplication of vetting is preventable. At its December 2018 plenary session, ACUS approved a recommendation that addresses the vexing issue of duplicative vetting and endorses the Guide. The recommendation calls for ACUS to create a webpage on MAX.gov, a website that OMB established to promote exchange of information among agencies. The webpage will be structured to encourage agencies to exchange information with one another about internal processes they have developed to avoid duplication in vetting. This interagency dialogue will enable agencies without current procedures in place designed to eliminate duplicative vetting to develop such procedures. The legal complexities that arise in partnerships, and the inefficiencies generated by duplicative vetting, will become more salient as partnerships become more prevalent. The ACUS recommendation, and its associated guide, are important first steps in helping agencies navigate the complex legal and vetting-related challenges they will increasingly confront with public-private partnerships. Source: Theregreview