Cross-sector partnerships, building USAID’s internal capacity and confusion over procurement reform were among the hot topics discussed by industry leaders at this year’s SID Global Congress in Washington, D.C.
The annual meeting hosted by the Society for International Development’s Washington chapter is a chance for representatives from a variety of development sectors to exchange views, network with potential partners and create spaces for cooperation among the competitive world of project bids and finding the next innovative idea.
Among the most well-attended sessions at the annual event was one on contracting procurement, which focused on clarifying roles and finding ways the U.S. Agency for International Development can improve procurement procedures — without the unlikely event of broad-scale legislative reform from a deeply divided Congress.
“We feel like there’s so much that we need to do, that we should work on that first, and then see what are the truly intractable things,” said USAID Assistant Administrator Eric Postel.
Prime contractors, small businesses and local procurement
At Thursday’s event, aid officials from the public, private and nonprofit sectors were all looking to find some common ground, despite what some observers are describing as turf battles between large and small organizations as well as small U.S. contractors and institutions in partner countries, which all are vying for precious U.S. funding.
One thing became clear: As the U.S. aid agency advances reforms under its USAID Forward agenda, many implementers continue to wonder how their role in the delivery of U.S. foreign assistance will change. For instance, should prime contractors continue to seek partnerships with U.S. small businesses or focus instead on partnering with local institutions abroad?
USAID— like other government agencies — has rules for engaging U.S. small business through small business set-aside contracts, procurements for which only small businesses may apply. But at the same time, the Obama administration’s declared goal is to increase local procurement — with civil society and other organizations in the developing world — to 30 percent of USAID’s technical assistance budget.
This pits U.S. small businesses against institutions in partner countries, where large contractors now have the tough choice to make when seeking subs. Those representing large implementing firms had a clear message for USAID: They want to remain the “coalition coordinators” for donor agencies. The subtext: We have a lot to offer, so don’t replace us with local implementing partners.
“USAID in particular has emphasized the importance of local capacity building, and I think the contractors have responded,” said Kathleen Flanagan, the president and CEO of Abt Associates who stressed that she was speaking on behalf of the Council of International Development Contractors, a coalition of for-profit companies interested in partnering with the U.S. government on foreign aid projects.
USAID reform and capacity
While much of the emphasis on Thursday was placed on what donors should do to open lines of communication and improve internal capacity, some event participants, like Mike Walsh, a former USAID chief acquisition officer who now works as DAI’s chief ethics and compliance officer, suggested that procurement reform should be driven by programming, and not the other way around.
Creative programming efforts, Walsh said, “should impose upon the contract people, who are doing the business relationship, different ways of thinking and of doing things,” citing performance-based financing for health services as one promising example.
Tim Beans, a former top USAID procurement official who now serves as IRD’s chief of business development, raised concerns about the agency’s capacity to process the influx of proposals that it has invited through a diverse set of new funding mechanisms such as grant challenges. Beans mentioned challenges that he experienced moving contracts through the agency, when USAID simply “could not move the money” and cited his “fear” that such problems would persist.
Donor officials present at the SID-Washington event acknowledged the need for procurement practices to keep pace with the massively increased number of actors in the aid landscape, and Postel reiterated the need for USAID to beef up its staff to speed up procurement.
“It’s very hard to hire and fill vacancies in the procurement area because people all over government are looking,” he said. “If you don’t have enough people to process, that slows you down.”
At the same time, Postel said that he was not in a position to make any major announcement on staffing or reform.
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About the author
Michael Igoe@AlterIgoe
Michael Igoe is a Senior Reporter with Devex, based in Washington, D.C. He covers U.S. foreign aid, global health, climate change, and development finance. Prior to joining Devex, Michael researched water management and climate change adaptation in post-Soviet Central Asia, where he also wrote for EurasiaNet. Michael earned his bachelor's degree from Bowdoin College, where he majored in Russian, and his master’s degree from the University of Montana, where he studied international conservation and development.
