Scoop: USAID partner organizations start receiving stop-work orders

A flurry of new directives from U.S. President Donald Trump’s administration over the past week has left many staff at the United States Agency for International Development, as well those at its partner organizations, dumbfounded about what will happen next. Central to this upheaval is a 90-day pause in disbursements of foreign aid that Trump issued on his first day in office. This was followed by the U.S. State Department issuing a stop-work order for existing grants and contracts and an immediate pause on new foreign aid spending. USAID then sent staff a series of memos outlining how the agency will implement Trump’s vision of an “America First” foreign policy, which includes every program being “thoroughly scrutinized.” As part of the scrutiny, the State Department will develop review standards within 30 days to ensure foreign assistance is aligned with Trump’s foreign policy agenda. This will then lead to decisions on whether to continue, modify, or terminate programs. Over the weekend, some USAID implementing partners began receiving notices to stop work, informing them that their project award was suspended. Devex obtained two of these orders sent to implementing partners in two African countries. The orders directed the organizations to immediately “stop, cease, and/or suspend any work” performed under the USAID funding agreement. This includes, but is not limited to, “a contract, task order, grant, cooperative agreement, or other acquisition or assistance instrument.” One notice told the partner to take all reasonable steps to minimize the costs incurred during the stop-work period. They must also issue a stop-work order and award suspension notice to all subawardees affected by the order. It noted exceptions, subject to further review, that include: 1. Emergency food assistance and associated administrative expenses for distributing that aid, such as salaries. 2. “Legitimate expenses” incurred before Jan. 24 under existing awards and those associated with stop-work orders, suspensions, and pauses. 3. The director of foreign assistance at the State Department can approve other exceptions. These orders have sent a wave of panic throughout the aid sector, as USAID staffers and partner organizations await further guidance on how this upheaval will unfold. Karl Goodsell, chief executive officer of Positive Change for Marine Life, told Devex that since the stop-work order was implemented, he and his team are “very anxious about what the future holds.” His organization has worked in seven countries with coastal communities on projects ranging from habitat restoration to waste management to sustainable fisheries. “With existing USAID contracts mid-implementation, we are uncertain of the impact this unexpected decision from the US Government will have on our vital programs, including the 28 people employed through USAID funding and the thousands of community members in the Pacific who benefit from our work,” he said. Their organization is working around the clock to make sense of it all and develop worst-case scenario contingency plans, he said. “If this Stop Work Order goes ahead, the impact will be catastrophic for countless people, organisations and governments who rely on USAID to deliver life-changing work,” he said. Olga Wall, chief executive officer of Avallon Consulting, a firm that assists small and foreign businesses and organizations interested in working with USAID, wrote on LinkedIn that when faced with a stop-work order, “clarity and strategy are essential.” She outlined her thoughts on what she considers a well-structured response from a partner organization to USAID to ensure compliance with the agency, protect operational readiness, and align with USAID’s priorities and precedent on what stop-work-order costs could be allowable, including idle labor. This includes steps such as outlining necessary expenses for continuity and expenses that can’t be reasonably minimized; highlighting the cost-benefit of maintaining readiness versus incurring higher termination or reactivation costs; and demonstrating how the activity aligns with performance indicators and U.S. foreign policy priorities, she wrote. And others are hoping that quantifying the on-the-ground impact of these stop-work orders could have some influence on how everything unfolds. Rabi Kiran Adhikari, chief executive officer of Sahayatri Consults, a Nepal-based consultancy, advised others to identify the number of employees, beneficiaries, and local partners affected by project suspensions or terminations and calculate anticipated financial losses, including operational costs over the next 90 days, and the financial burden of complying with local labor laws as well as engaging policy makers. Along with stop-work orders, implementing partners have also started to receive notice around what they should do in response to Trump’s order to shut down diversity, equity, inclusion, and accessibility, or DEIA, programming across the federal government. If an organization has an award and subawards that include DEIA-related activities, it must send an email to USAID certifying that these activities have stopped and to confirm that no further costs are incurred, according to memos sent to implementing organizations that were obtained by Devex. Organizations that are managing awards that don’t include DEIA-related activities must also send a letter to USAID to make it aware that their programming doesn’t include these activities.