In Issue of Over-reliance on Contractors, US Development Firms Fire Back at Rajiv Shah

U.S. development contractors urged the U.S. Agency for International Development to change its “tone” of discussion regarding implementing partner firms if it wants to achieve its goals amid the challenging fiscal environment.

The Professional Services Council, a coalition of 350 U.S. development contractors, said USAID Administrator Rajiv Shah’s Jan. 19 speech hosted by the Center for Global Development in Washington devalued the role of development firms in implementing the aid agency’s programs.

In his Jan. 19 speech, Shah blasted over-reliance on contractors, saying that USAID was “no longer satisfied with writing big checks to big contractors and calling it development … Partners need to achieve the outcomes they seek in the time they suggest. Otherwise, we will seek out those who can.”

>> Rajiv Shah Unveils New USAID Evaluation Policy, Previews Other Contracting Reforms

“[S]till missing from the agency’s discourse is a thoughtful, accurate declaration on the role and value of U.S. development firms in the design, execution, and evaluation of USAID programs,” PSC President and chief executive officer Stan Soloway writes in a Feb. 7 letter to Shah. “All too often, we hear commentary and suggestions, often from official or semi-official sources, suggesting that the role of these firms is not nearly as valued as it needs to be.”

Soloway urges USAID to reward results and innovation rather than “arbitrarily preclude” development contractors based on their business model.

Soloway explains: “The ‘development enterprise’ is clearly best served by a true competition of ideas and a transparent and unbiased process for determining the best mechanism for the delivery of individual development assistance programs, rather than being hobbled by a presumption that one business model is superior to another.”

“Indeed, any inference that for-profit companies are less capable of achieving, or any less committed to, the goals and aspirations of the innovative, results-driven development venture USAID seeks to build does a disservice to the initiative itself,” he adds.  

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About the author

  • Ma. Rizza Leonzon

    As a former staff writer, Rizza focused mainly on business coverage, including key donors such as the Asian Development Bank and AusAID.