Sustainability rules for contingency capital projects

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1. Why the rule exists in the statute

Capital projects built for a host country during an overseas contingency operation carry a statutory check on necessity and sustainability, codified at 22 U.S.C. 2421f. The rule applies commencing 60 days after January 2, 2013 (22 U.S.C. 2421f(a)(1)). From then on, funds of the Department of Defense, the Department of State and the United States Agency for International Development are restricted. They may not be obligated or expended for a covered capital project until an assessment is completed (22 U.S.C. 2421f(a)(1)). The assessment addresses the necessity and sustainability of the project.

2. Who makes the assessment

For Defense funds, the Secretary of Defense completes the assessment in consultation with the United States commander of military operations in the country in which the project will be carried out (22 U.S.C. 2421f(a)(1)(A)). For State funds, the Secretary of State completes it in consultation with the Chief of Mission in that country (22 U.S.C. 2421f(a)(1)(B)). For funds of the Agency for International Development, the Administrator completes it in consultation with the Mission Director and the Chief of Mission (22 U.S.C. 2421f(a)(1)(C)).

3. What the assessment must contain

Each assessment shall include, but not be limited to, six elements (22 U.S.C. 2421f(a)(2)). The first is an estimate of the total cost of the completed project to the United States (22 U.S.C. 2421f(a)(2)(A)). The second is an estimate of the financial and other requirements necessary for the host government to sustain the project on an annual basis after completion (22 U.S.C. 2421f(a)(2)(B)). The third is an assessment of whether the host government has the capacity, in both financial and human resources, to maintain and use the project after completion (22 U.S.C. 2421f(a)(2)(C)).

The fourth is a description of any arrangements for sustaining the project after completion if the host government lacks that capacity (22 U.S.C. 2421f(a)(2)(D)). The fifth is an assessment of whether the host government has requested or expressed its need for the project, and an explanation of the decision to proceed absent such request or need (22 U.S.C. 2421f(a)(2)(E)). The sixth, where applicable, is an assessment by the Secretary of Defense of the effect of the project on the military mission of the United States in the country concerned (22 U.S.C. 2421f(a)(2)(F)).

4. Which projects are covered

A covered project is any capital project overseas for an overseas contingency operation and for the benefit of a host country (22 U.S.C. 2421f(b)(1)). It must be funded by the Department of Defense, the Department of State or the Agency for International Development (22 U.S.C. 2421f(b)(1)). Coverage depends on value. A project that directly supports building the capacity of indigenous security forces in the host country is covered if its estimated value exceeds $10,000,000 (22 U.S.C. 2421f(b)(1)(A)). Any other project funded by the Department of State or the Agency for International Development is covered above $5,000,000 (22 U.S.C. 2421f(b)(1)(B)). Any other project is covered above $2,000,000 (22 U.S.C. 2421f(b)(1)(C)).

Two kinds of project are excluded (22 U.S.C. 2421f(b)(2)). They are projects for military construction, as defined in section 114(b) of title 10, and military family housing projects under section 2821 of that title.

5. Definitions

A capital project has the meaning given in section 2421e (22 U.S.C. 2421f(e)(2)). That meaning reaches building, expanding or altering a physical facility or physical infrastructure, or acquiring equipment for one, along with related design, procurement and feasibility services (22 U.S.C. 2421e(2)). An overseas contingency operation means a military operation outside the United States and its territories and possessions that is a contingency operation as defined in section 101(a)(13) of title 10 (22 U.S.C. 2421f(e)(3)).

The appropriate committees of Congress are, in the Senate, the Committees on Armed Services, Foreign Relations, Homeland Security and Governmental Affairs, and Appropriations (22 U.S.C. 2421f(e)(1)). In the House, they are the Committees on Armed Services, Foreign Affairs, Oversight and Government Reform, and Appropriations.

6. Waivers

The Secretary of Defense, the Secretary of State or the Administrator, as applicable, may waive the limitation in order to initiate a capital project (22 U.S.C. 2421f(c)). The waiver requires a determination that the project is in the national security, diplomatic or humanitarian interests of the United States. The first semi-annual report after any waiver must include a detailed justification of the waiver. Not later than 90 days after issuing a waiver, the official must still submit the assessment for the project to the appropriate committees of Congress.

7. Semi-annual reports

Not later than 30 days after the end of any fiscal-year half-year in which an assessment is conducted, the official who conducted it reports to the appropriate committees (22 U.S.C. 2421f(d)(1)). The report sets forth each assessment conducted during that half-year, including the six elements. For each project, it also gives an evaluation of effectiveness, other than by amount of funds expended (22 U.S.C. 2421f(d)(2)(A)). That evaluation includes, at a minimum, the stated goals of the project, and the actions taken to assess and verify whether the project has met them or is on track. It also includes the current and anticipated levels of involvement of local governments, communities and individuals.

For each country or region where a covered project is being carried out, the report also assesses the current and anticipated risks of corruption or fraud in connection with the project (22 U.S.C. 2421f(d)(2)(B)). Each report is submitted in unclassified form, but may include a classified annex (22 U.S.C. 2421f(d)(3)). The general capital project provisions are covered in capital projects in foreign assistance.

8. How the steps fit together

Read together, the section works in a fixed order. A project is first tested against the covered project definition and its value thresholds (22 U.S.C. 2421f(b)(1)). If it is covered, the assessment is completed before the funds are obligated or expended, unless a waiver is issued (22 U.S.C. 2421f(a)(1) and 22 U.S.C. 2421f(c)). Each assessment then appears in the semi-annual report for the half-year in which it was conducted (22 U.S.C. 2421f(d)(1)). Where a waiver was used, the assessment still follows within 90 days, and the justification appears in the first report after the waiver (22 U.S.C. 2421f(c)).

Key terms

Covered capital project	A host country project for a contingency operation above the dollar thresholds.
Sustainability assessment	The six-element review that must precede obligation of funds.
Overseas contingency operation	A contingency operation outside the United States and its territories.
Waiver	A national security, diplomatic or humanitarian determination allowing a project to start.
Semi-annual report	The report due 30 days after a half-year in which assessments were made.

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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