How USAID prime contractors spent $1B on subcontracts in 2022

Devex has reported extensively on USAID’s assistance and acquisition mechanisms. We are capping off our series with an analysis of the agency’s spending through subcontracts. The U.S. Agency for International Development channels a significant amount through acquisitions — also known as contracts — totaling $5.9 billion in the fiscal year that ended in September 2022. Prime awardees use a portion of the money they receive from USAID to procure goods and services from other organizations through subcontracts. In a way, this process allows other organizations — including local implementers in low- and middle-income countries — to receive money from USAID without having to compete for prime contracts. Devex took a deep dive into the USASpending.gov data to see how much the USAID prime contractors spent on subcontracts in FY 2021-22 — where the money went and who received the largest share among local organizations. The data suggests that USAID prime contractors passed on between $1 billion and $1.2 billion to other organizations through subcontracts in FY 2021-22. The money came from prime awards that were awarded between FY 2012-13 and FY 2021-22, with a maximum total prime amount of $5.3 billion. USASpending data may be updated anytime, which might explain the slight difference with the total figures in this piece. How accurate is the subcontract data? As with our previous analysis of USAID’s subawards, Devex also found some discrepancies with the subcontract data. According to USASpending, prime contractors spent nearly $1.1 billion through subcontracts. However, our analysis revealed that around 200 entries worth $120.8 million were duplicates — bringing the total to a little over $1 billion. We identified duplicates by looking into subcontracts with identical amounts, awarded dates, and prime awards. USASpending told Devex in our previous correspondence that prime awardees enter the data directly to the FFATA Subaward Reporting System, or FSRS, operated by the General Services Administration — making it susceptible to duplicates or errors if the intended process is not followed. Who spent the most on subcontracts? USAID’s long-standing partners were also the leading sources of subcontracts in FY 2021-22. Over a third of the total, worth $352.9 million, came from Chemonics. The biggest portion of this, worth $57.1 million, went to Missionpharma, a global pharmaceutical company based in Denmark. Other top recipients included Bolloré Transport and Logistics Zambia, with $34.8 million, its parent company, Bolloré Logistics, with $30 million, and RSC Holdings, with $29.1 million. Deloitte Consulting ranked next with $104.1 million. Its main awardee was Deloitte South Africa, with $25.6 million, followed by ECO Consult, with $7.2 million, and Consultec, with $7 million. More than half of the amount Deloitte Consulting spent on subcontracts, worth $54.1 million, went to its offices across the globe, including in Vietnam, Georgia, Ghana, and India. DAI Global also spent a significant amount, worth $99.5 million. This was divided among over 200 recipients, with CrossBoundary receiving the largest amount — $11.5 million. Other primary recipients were Training Resources Group, with $9.1 million; the British Asian Trust, with $3 million; and McKinsey & Company D.C., with $2.9 million. Are prime contractors hiring locally? The data shows that prime contractors spent $352 million on local subcontracts — 34.1% of the total and around the same percentage as with the local subawards. As with our previous reports on localization, we define local as organizations implementing projects in their own countries. Another $31.9 million went to LMICs-based organizations for activities in other countries. Chemonics was the top prime implementer procuring locally with $116.9 million, or a third of the total. Deloitte ranked next, with $62.9 million, Deloitte Tanzania, with $29.9 million, then RTI International, with $12.1 million. The bigger chunk of the money, worth $648 million, went to recipients in high-income countries. U.S.-based subcontractors accounted for the largest share, with $463.4 million; followed by Denmark, with $57.5 million; and France, with $55.7 million. Who among the local organizations received the money? Recipients in lower-middle-income countries accounted for 57.4% of the amount that went to local organizations, worth $202.1 million. Meanwhile, organizations in low-income countries received $91.1 million, then implementers in upper-middle-income countries got $58.8 million. Among supplier countries, Burkina Faso received the biggest percentage of local subcontracts, worth $54.6 million, or 15.5% of the total. Tanzania ranked next, with $47.3 million. Then Zambia, with $40.7 million; Ukraine, with $25.9 million; and South Africa, with $24.4 million. CRM Consulting, a consulting and training firm specializing in customer relations and data collection, was the overall top local recipient, with $49.5 million. This award from Chemonics is under the Support Which Implements Fast Transitions Program in Burkina Faso — USAID’s initiative on stability, peace, and democracy. Bolloré Transport and Logistics Zambia ranked next, with $34.8 million, which came from a single award from Chemonics. The logistics company, which operates in Africa, was contracted for distribution services related to the Global Health Supply Chain, or GHSC, HIV/AIDS program in Zambia. Management and Development for Health follows, with $21 million. The award from Deloitte Consulting enables MDH to work directly with local governments and communities to improve access to HIV/AIDS facilities and strengthen the capacity of the health workforce to deliver related services in Tanzania. 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.