• Inside Development

Bleak prospects for USAID partners post-sequestration

By John Alliage Morales14 March 2013

U.S. Agency for International Development Rajiv Shah. Photo by: Rodney Choice / Choice Photography / USAID / CC BY-NC

Contractors for the U.S. Agency for International Development could see current or future funding reduced or their contracts scrapped as a result of the sequestration.

Those are some of the options now, which, according to USAID, are based on an initial diagnosis of the sequestration’s painful impact on the agency’s programs.

“USAID may determine it necessary to reduce current or future funding of your agreement or completely terminate your assistance agreement,” Aman Djahanbani, USAID senior procurement executive, told funding recipients in a notice dated March 12.

The full extent of the deep cuts on USAID operations and partners’ revenues, though, may only come to light once Congress passes a budget resolution that keeps the U.S. government running until the fiscal year ends in September. Congress is likely to vote on the continuing resolution next week.

“As you know, the FY 2013 continuing resolution is currently being considered by the Congress,” Kamyl Bazbaz, USAID spokesperson, told Devex. “Only when that is enacted will we be able to determine the impact of the sequester on our programs.”

The initial analysis, Bazbaz said, was “only to determine the universe of USAID’s active contracts and grants, not the levels or who will be affected.”

Bazbaz noted that all awarded projects “are subject to the availability of funding.” So far, USAID has provided about $2.7 billion in prime awards and $158 million in subawards.

Bazbaz earlier told Devex that the sequestration would cut foreign assistance by $1.7 billion this year. That means reducing the humanitarian assistance account by $200 million and the global health account by $400 million, Bazbaz said.

USAID Administrator Rajiv Shah has previously suggested ways to soften the blow of sequestration on USAID operations. These include implementing a hiring freeze, modifying management and professional support services contract, and reducing centrally planned information technology investments.

The across-the-board cut, which took effect March 1, would also reduce USAID operations by about $74 million this year.

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About the author

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John Alliage Morales

As a staff writer, John Alliage Morales covers the Americas, focusing on the world's top donor hub, Washington, and its aid community - from Capitol Hill to Dupont Circle, Foggy Bottom to the downtown headquarters of USAID, the World Bank and Millennium Challenge Corp. Prior to joining Devex, Alliage worked for a variety of news outlets including GMA, the Philippine TV network, where he conducted interviews, analyzed data and produced in-depth stories on development and other topics.


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