The U.S. Court of Federal Claims will soon hear arguments in a case that could force the U.S. Agency for International Development to reconsider how it spends billions of dollars in U.S. foreign assistance funding.
USAID has a range of options when it comes to how it funds development projects around the world. One of the biggest distinctions the agency must make is whether it seeks to procure goods or services — which typically requires a contract — or whether it seeks to fund an organization to advance its own mission — which typically requires a grant or cooperative agreement.
Generally speaking, for-profit companies win more contracts, while nonprofit organizations win more grants and cooperative agreements. That means USAID’s choice of which funding instrument to use is a high-stakes decision that can advantage some potential bidders and disadvantage others.