The Foreign Service Journal, May 2019

FCS VP VOICE | BY DANIEL CROCKER AFSA NEWS THE FOREIGN SERVICE JOURNAL | MAY 2019 57 Views and opinions expressed in this column are solely those of the AFSA FCS VP. Contact: | (202) 482-9088 Making the BUILD Act a Success If the Trump administration and Congress want to see American companies winning more overseas contracts through the BUILD Act, we need more Commercial Service boots on the ground. In October 2018 President Donald Trump signed the BUILD Act (Better Utilization of Investments Leading to Development), which enjoys strong bipartisan support in Congress and puts new tools into the hands of the U.S. government to help American companies win key development projects overseas. There is clear recogni- tion of the challenges that U.S. companies face when competing for such projects. In Africa alone, the Chinese government announced $60 billion in new invest- ment in September 2018, much of it in the service of its global Belt and Road Initiative, with geostrategic implications for America’s influence throughout the continent. And that’s just China: governments from Europe, Japan and Korea to Turkey and India are also aggressively promoting their companies. How does the Commer- cial Service, in concert with its State counterparts, play a role in making the BUILD Act successful? Let’s take a power gen- eration project in Uganda as an example, from start to finish. Imagine a leading Ugandan politician winning an election by promising a number of projects, most of which are aspirational. The first step would be to deter- mine which among those projects are commercially viable. For that, having Com- mercial Service boots on the ground, talking with the Min- istry of Energy and with key energy experts, is essential. If the project looks reason- able, a next step might be for our Commercial Service officers to reach out to their U.S. field colleagues to find qualified U.S. companies that might be interested. One of those companies might see enough upside in the project to come to Uganda, to meet not only with government officials but also trustworthy local partners who could repre- sent their interests on an ongoing basis. The Com- mercial Service arranges such meetings, which in the upstream phases are critical for influencing the require- ments and having on-the- ground representation. At this point the new U.S. International Development and Finance Corporation (USDFC), established under the BUILD Act, could be brought in as well. Their par- ticipation would ultimately lower the investment risk for the U.S. company and U.S. banks, allowing the U.S. company to make a more financially attractive bid and putting the Ugandan gov- ernment on alert that with U.S. government financing involved, the procurement process will be watched closely. If the U.S. company then asks for explicit advocacy from the U.S. government, the Commercial Service’s Advocacy Center will vet that request through an interagency process before greenlighting it and will coordinate with high-level officials—often including the Secretary of Commerce and the U.S. ambassador—to engage directly with the Ugandan government. Com- mercial Service officers on the ground play a leading role in determining where— and at what level—this advocacy process will be most effective. If the U.S. company fails to win the contract for sus- pect reasons, then the Com- mercial Service engages on the company’s behalf to challenge the outcome. We typically have an interest in resolving it quietly and expeditiously instead of seeing the company pursue expensive and drawn-out international arbitration. Even when we lose in our quest to resolve it quietly, we send a strong signal that the U.S. government stands for a level playing field. But if the U.S. company wins the contract, then downstream vigilance is also a role that the Commercial Service plays. If the U.S. energy company can’t revise its electricity tariffs in accor- dance with the contract, for instance, the Commercial Service will engage the Ugandan government on its behalf to ensure sustained and nonintermittent provi- sion of energy. When viewed within the total life cycle of a foreign project, the role of the Com- mercial Service in making the BUILD Act a success is clear. The new USDFC can’t hope to dial it in from Washington, D.C. They need our assistance throughout the process. But the Com- mercial Service only has a presence in 11 out of the 54 countries in Africa, and there are often 10 times as many Chinese diplomats in these countries. If the Trump administra- tion and Congress want to see American companies win- ning more overseas contracts through the BUILD Act, we need more Commercial Ser- vice boots on the ground. n