The U.S. Agency for International Development’s obligated funding for its top 20 contract awardees in fiscal 2012 accounted for nearly three-quarters of its contract spending that year. Against the backdrop of ongoing budget pressures in Washington, USAID also recorded a significant increase in its contract spending. USAID awarded more than $4.9 billion in contracts in fiscal 2012 - representing a 9 percent increase from fiscal 2011. While USAID awards the bulk of its contracts to for-profit groups, nongovernmental organizations also win a sizeable chunk of the agency’s contract funding.
Since the Clinton administration, USAID has channeled the bulk of its contract assistance through multiyear, umbrella agreements called indefinite quantity contracts. Designed to streamline the U.S. aid agency’s procurement, IQCs allow only pre-qualified firms or nonprofits to bid on a contract. Amid USAID Forward’s push for more competition at the agency, however, USAID officials have indicated that the agency intends to reduce its reliance on IQCs, in part, by awarding more stand-alone contracts.