Money Matters: How USAID plans to spend its cash in the third quarter

This week, USAID will provide an update on its business for the third quarter of this year. Ahead of the call, we look at the numbers to parse out where the agency plans to dedicate its funding and what it will decide to prioritize. + Are there topics you want to read more about in Money Matters? We want your feedback. NextGen is next The NextGen suite of contracts could be worth up to $17 billion over a decade. Through these contracts, USAID aims to fund the procurement and distribution of health products to countries around the world. They are the successors to a large contract currently administered by Chemonics — one which has been controversial since the outset. An analysis of the USAID business forecast by my colleague Miguel Antonio Tamonan found that NextGen contracts make up around 40% of USAID’s published pipeline. But his analysis also found that these contracts have been significantly delayed, and that some have been temporarily delisted altogether — meaning while the agency still plans to seek requests for proposals at some point, that is unlikely to happen in this quarter. However, there is some progress. USAID very quietly — with a brief note on one of its online pages — announced that it has awarded its first NextGen contract, the Control Tower contract, to Deloitte Consulting, in a deal worth $105.9 million. The contract is intended to create a data hub and centrally coordinate the work of multiple prime contractors on all the other NextGen contracts. The Control Tower contract is necessary because of a decision to split up the global health supply chain award into several parts, which was driven by USAID’s desire to avoid a single point of failure, in the wake of its experiences with the current contract. With several different contractors all delivering different parts of NextGen, the Control Tower contract is intended to coordinate and share data. But there are question marks over how well it can be made to work. It will involve gathering information from many different suppliers, all with their own systems and structures. Those contractors must both want to share data and be able to in a way that makes sense. Perhaps those thorny challenges are why the award of the contract had taken so long — close to two years since the agency had asked for proposals for it way back in August 2021, and more than a year longer than was originally envisaged. The battle for the remaining eight contracts continues. Read: $3 billion in new opportunities in USAID’s Q3 business forecast (Pro) + A Devex Pro membership gives you access to all our coverage and analysis of USAID, including funding insights and forecasts. If you haven’t already, start your 15-day free trial of Pro today. Funding activity We publish tenders, grants, and other funding announcements on our Funding Platform. Here are some of the ones that have been viewed the most in the past 10 days. USAID has allocated $524 million to support urgent humanitarian aid efforts in response to the crisis in the Horn of Africa. The United Nations is in search of a consulting organization to create a comprehensive, quality improvement action plan for the national tuberculosis care program in Tajikistan. The World Bank has approved $450 million for a program to make industrial businesses in Turkey more eco-friendly. The Global Green Growth Institute is inviting interested firms to bid for a project to map the circular economy small and medium-sized enterprises ecosystem in Jordan. The Bill & Melinda Gates Foundation has provided $4.46 million for a workforce training and skills development program in the field of biomanufacturing in Africa. + Try out Devex Pro Funding today with a free five-day trial, and explore funding opportunities from over 850+ sources in addition to our analysis and news content. The power of nonexperts “Philanthropy is the only sector where the nonexperts tell the experts what to do,” Naina Batra, chief executive of the Asian Venture Philanthropy Network, tells my colleague David Ainsworth. Batra is puzzled. How did it happen that development ceded so much power to the folks with the purse strings — philanthropists. In this wide-ranging interview, Batra makes the case for blended finance, devolved authority and how to stop giving money away pretty badly. Read: Is development a sector where money ‘is given away pretty badly’? (Pro) ICYMI: 9 emerging Asian donors give $20B a year. Who are they? (Pro) Where is the money? At the United Nations climate summit negotiations in Egypt last year, agreement to create a Loss and Damage Fund to pay for climate change-related harms done to lower-income countries was hailed as a game changer. But nearly a year later, how the fund will be structured and where it will get its money is still being haggled over in deeply contentious terms. The fund’s core financing should be “grant based or extreme, extreme, extreme concessionality,” argues Ambassador Mohamed Nasr, the lead negotiator for Egypt, which currently holds the climate negotiations presidency. His comments reveal some of the key fractures in the discussions to create the new fund, which has gone on mostly behind closed doors, reports my colleague William Worley. Read: Conflict brews as COP envoy says climate fund needs grants, not loans Background reading: Ban Ki-moon calls for a 'firm and clear' loss and damage road map Flawed budget The European Union’s budget lacks transparency. So says the European Court of Auditors which found a number of shortcomings in the €79.5 billion (around $85 billion) Global Europe instrument that covers 70% of EU spending outside the bloc. My colleague Vince Chadwick spoke with Piotr Zych, who led the audit. He revealed that how the bloc allocates money was deeply concerning. Despite funds for countries in the EU’s neighborhood and those in sub-Saharan Africa, Asia, and Latin America having been merged under the bloc’s 2021-2027 funding instrument, auditors found that the commission uses different criteria to set funding for the two groups, Vince reports. Read: Audit finds design flaws in EU aid budget 🎶 I wrote this week’s Money Matters while listening to pianist and composer Keith Jarrett’s performance at The Köln Concert in 1975.