West Bank and Gaza: State Should Incorporate Leading Practices and Lessons Learned into Anti-Terrorism Oversight

Overview

The GAO found that USAID allocated $624 million in Economic Support Fund (ESF) assistance for the West Bank and Gaza for FY 2022–2024, funding 37 prime awards across sectors such as water infrastructure, education, and health. State took over administration of this ESF funding from USAID in July 2025; all 37 awards have ended except support to the East Jerusalem Hospital Network, and NEA is managing the remaining activities. Congress appropriated ESF funding in FY 2025 and National Security Investment Programs (NSIP) funding in FY 2026 that State can use for the West Bank and Gaza if oversight requirements are met. GAO found that State has delayed replacing USAID’s anti‑terrorism policies and procedures for the region and recommended that State incorporate leading practices and USAID lessons learned — for example, mandatory provisions in awards and timelines for compliance audits — to strengthen oversight and reduce diversion risk. Contractors with international development, humanitarian, health, water, education, or economic development portfolios should prepare for tightened anti‑terrorism oversight, enhanced vetting and certification expectations, and potential new award terms tied to compliance audits and mandatory provisions. See the Winning Federal Contracts Guide (/insights/winning-federal-contracts) and related guidance: CMMC (Cybersecurity Maturity Model Certification) Compliance Guide (/insights/cmmc-compliance-guide) and CUI (Controlled Unclassified Information)-Safe CRM Guide (/insights/cui-safe-crm-guide).

Immediate Actions (This Week)

• [ ] Inventory existing and recently completed contracts and subawards that relate to West Bank and Gaza work (including any engagement with the East Jerusalem Hospital Network) to identify exposure and documentation gaps.
• [ ] Review current anti‑terrorism certifications, vetting procedures, and compliance audit records for completeness and currency; flag missing items that could be requested by State/NEA.
• [ ] Assign a single point of contact (capture or compliance lead) to monitor State/NEA announcements and coordinate responses for any follow‑on ESF or NSIP opportunities.
• [ ] Begin compiling past performance and audit evidence that demonstrates compliance with anti‑terrorism obligations and safeguards against diversion.
• [ ] Monitor for official solicitations, policy updates, and specific oversight/doctrine documents from State and USAID before making bid/no‑bid decisions.

Short-Term Actions (30 Days)

• [ ] Develop or update an anti‑terrorism compliance matrix that maps your obligations (certifications, vetting, audit rights, mandatory award provisions) to internal policies and responsible personnel.
• [ ] Update or draft standard award language templates and flow‑down clauses to reflect GAO‑recommended leading practices (e.g., mandatory provisions and audit timelines) so you can respond quickly if State adopts them.
• [ ] Train program and compliance staff on vetting procedures and documentation requirements likely to be requested by State/NEA.
• [ ] Reach out to your subawardees and partners to confirm their capacity to meet intensified vetting, certification, and audit timelines.

Long-Term Actions (90+ Days)

• [ ] Integrate mandatory anti‑terrorism provisions into your contract and subaward templates (subject to final State guidance) and establish a documented policy for enforcing and auditing those provisions.
• [ ] Formalize timelines for internal compliance audits and corrective-action plans aligned with GAO’s recommendations and ready to mirror any State audit timelines once announced.
• [ ] Build capture strategies for potential ESF and NSIP opportunities that explicitly address anti‑terrorism oversight, vetting capacity, and audit-readiness as differentiators in technical approaches.
• [ ] Maintain an audit‑ready evidence repository (contracts, subaward flow‑downs, vetting records, certifications, corrective-action logs) and periodic attestations to support State oversight.

Compliance Checklist

• [ ] Anti‑terrorism certification — ensure forms and attestations are current and readily accessible.
• [ ] Vetting procedures — documented process for staff, partners, and subrecipients; evidence of completion for each covered individual/organization.
• [ ] Compliance audit readiness — documentation and a timeline for internal audits that can support corrective action before award expiry.
• [ ] Mandatory award provisions — template clauses prepared for rapid inclusion if State issues required language.
• [ ] Risk identification and mitigation documentation — project-level risk assessments that show how terrorism/diversion risks are evaluated and mitigated.
• [ ] Subrecipient oversight records — flow‑down clauses, monitoring schedules, and corrective-action logs.

Compliance scope TBD — re‑evaluate when official guidance is published by State/NEA or USAID.

Resources

• USAID guidance — TBD pending source review
• State Department guidance — TBD pending source review

(Also see internal resources: Winning Federal Contracts Guide (/insights/winning-federal-contracts), CMMC Compliance Guide (/insights/cmmc-compliance-guide), CUI-Safe CRM Guide (/insights/cui-safe-crm-guide).)

How Cabrillo Club Automates This

• Cabrillo Signals War Room — Our War Room already detected this GAO event and delivered this briefing within minutes. It continuously monitors regulatory changes, agency shifts, and policy reports so your team receives alerts when State or USAID publish new anti‑terrorism oversight guidance, award clause templates, or solicitation updates tied to ESF/NSIP funding. For this event, War Room flags GAO recommendations and the State takeover timeline so you don’t miss follow‑on requirements.
• Cabrillo Signals Match Engine — When State’s oversight posture changes, Match Engine automatically re‑scores your opportunity pipeline based on updated risk and compliance signals. It adjusts match scores for opportunities tied to West Bank and Gaza assistance, elevates opportunities where you have relevant past performance (for example healthcare or water infrastructure), and deprioritizes opportunities where you lack required vetting controls.
• Cabrillo Signals Intelligence Hub — Use the Intelligence Hub to track affected agencies (USAID, State), the listed market segments, and the NAICS codes included in your tags. Save searches for ESF and NSIP‑related solicitations and set real‑time alerts for any award clause templates, audit‑timeline guidance, or NEA policy updates that match this event profile.
• Proposal Studio (Proposal OS) — Proposal Studio generates compliance matrices and first‑draft technical approaches that explicitly call out anti‑terrorism certifications, vetting procedures, and audit readiness. It pulls your past performance evidence into draft narratives and prepares compliance response language to address mandatory provisions and audit timelines, accelerating bid preparation while preserving audit‑ready documentation.
• Proposal Studio Workflow Tracker — The Workflow Tracker runs your 9‑gate capture process and automatically routes compliance reviews to contracts and legal. It tracks supplier and subrecipient certifications, enforces review gates for vetting and audit evidence, and compiles an audit‑ready package at submission time.

These Cabrillo features reduce manual tracking, keep your capture team aligned with GAO/State signals, and ensure rapid response to new oversight requirements. Contact your Cabrillo account team to enable the saved searches and automated workflows above and to configure alerts for ESF/NSIP developments.

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