Understanding USAID: A glossary of common terms in procurement

Since taking the helm as administrator of the U. S. Agency for International Development last year, Samantha Power has talked about the agency’s aim to become more localized. And the agency has launched the New Partnerships Initiative to make that happen.

But becoming a “new partner” and engaging in USAID’s procurement can be a complex process. Power herself said last year that local partners in particular can lack the internal accounting and legal knowledge to apply for USAID contracts. Plus, there are myriad acronyms and USAID-specific terminology to navigate.

To remedy this, USAID launched workwithusaid.org, which aims to guide organizations through the process of partnering, as well as a Linkedin USAID group, Twitter page, and USAID’s partner directory. But even with all this support, determining how to become a USAID partner can still be difficult.

To help, Devex has compiled a glossary comprising the most used and least understood terms in USAID procurement, as well as where they might appear.

How USAID shares its priorities

As a starting point, organizations should begin exploring USAID’s priorities, goals, and potential funding areas to see where there might be overlaps and potential for partnering. There are several resources that will help with this.

USAID business forecast: Organizations looking to apply for USAID funding should start by exploring this tool. It’s an online dashboard that details potential upcoming funding opportunities. It is frequently updated as projects and plans evolve. The agency supplements the forecast with quarterly calls where partners, both existing and potential, can ask questions. A document is released afterward with all the answers USAID is able to provide.

Country development cooperation strategies: These strategies give some insight into what USAID might consider funding. They lay out a three- to five-year plan, alongside specific goals and projects, for a USAID country. There are also regional development cooperation strategies taking a broader view.

Annual program statements: These are statements outlining what programs USAID believes are needed. An APS is not an opportunity that organizations can bid for, but it is an opportunity to begin to work out the common ground between what USAID might want, and what your organization can deliver. In 2021, APSs were released on locally led development, the global development alliance, and development innovation ventures.

Modes of engagement

Once USAID is ready to begin funding a new project, there will be various touchpoints. These include:

Request for information: Otherwise known as an RFI, this is where the agency states a potential area it could be interested in funding. Organizations with subject knowledge are encouraged to share more about the need and possible approaches. For example, in February, USAID together with the government of Zimbabwe, issued an RFI to find out more about potential new activity on anti-corruption.

While it may or may not lead to a funding opportunity, submitting information as part of an RFI is a way to get noticed by USAID and lobby for your technology, approach, or project. Between April 1, 2021 and March 31, 2022, USAID released 163 RFIs, according to the Devex funding database.

Pre-solicitation: This often follows an RFI. It is a procurement notice announcing that a project, contract, or grant is forthcoming. It will include information on what the funding is looking to do as well as some high-level background information. This allows organizations to begin preparing a proposal for when the opportunity opens to submissions.

In March, USAID released a pre-solicitation on USAID Agricultural Inputs Activity where the aim is “to increase the availability, accessibility, and use of critical agricultural inputs and technology for critical agricultural value chains.”

Usually, a presolicitation will be followed by a solicitation — a request to bid for work. In some cases the time between pre-solicitation and solicitation can be as little as a few days but in other instances it’s several months.

Notice of funding opportunity: Otherwise known as a solicitation or specific procurement notice, this comes after the pre-solicitation stage and announces that USAID has assistance funding available to bid for. See below for definitions of assistance and acquisition funding.

The request will typically include a problem statement, development hypothesis, activity description, and information on how to apply and how applications will be evaluated. A recent NOFO called for applications on how to implement high-impact maternal, newborn, and child health activity in Myanmar. Bidders should respond to such calls with a concept note no longer than 23 pages.

Addendum: Also known as a round, this is a type of NOFO and therefore a funding opportunity that can be bid for. It usually follows an APS and includes more information on the need USAID is hoping to address as well as the specific country and objective. The response could be either a concept note or grant application.

Request for proposals: This is also a solicitation but refers specifically to acquisition funding. This is where USAID is looking to deliver specific services or items. Recent RFPs called for local communications support in Uganda, intranet redesign in the U.S., and security services in Afghanistan. Requests typically share what service of supplies USAID needs and how bidders will be evaluated. Bidders should respond with information on costings and supply.

Co-creation process: In some instances, USAID will put out a call for concept notes. These are intended as initial ideas to help generate a conversation with USAID and others around solutions to a specific development problem. Following a period of six months and multiple events and consultations, USAID will then award funding to take this project forward. The funding usually goes to a consortium of partners with one taking the lead.

Terms of reference: Following a solicitation, USAID usually shares terms of reference, or TOR. These are the specific requirements of the funding opportunity and instructions on what the bidder will have to do in order to apply. Information such as the deadline to submit and the budget to be allocated are included. The response here would be to submit a full proposal rather than a concept note.

Funding mechanisms

In addition to being aware of the points at which USAID makes contact, it is also important to be aware of the ways in which USAID gives out funding. Here are some of the more common mechanisms:

Assistance and acquisition: These terms describe the way in which USAID is looking to engage partners. Acquisition focuses on “the purchase of goods and services through a contract” and is typically used where USAID knows what it wants – perhaps the delivery of items such as the delivery of drugs or mosquito nets, or construction services.

Assistance refers to support the U.S. government provides, usually to an NGO, and most commonly through a grant. Another mechanism for assistance is the cooperative agreement, which differs from a grant because there is a much higher degree of involvement from agency staff in things such as program design, staff training, and data collection.

Indefinite delivery and indefinite quantity: Also known as IDIQ, this is a contracting mechanism issued to pull in responses from a series of organizations that are able to address a specific need. Typically, IDIQs are for larger organizations with considerable capacity, which can be called on to deliver services at short notice.

Successfully bidding for an IDIQ does not guarantee a minimum amount of work. Instead, organizations go onto a shortlist of preferred suppliers. Only organizations on that shortlist can bid for task orders. See below.

Task orders: This is a type of solicitation that typically goes out at short notice and requires a less arduous bidding process. However, only those already admitted under the IDIQ umbrella can bid. Last year, a task order was put out for financial management and capacity building services for the health services academy and department of health services in Pakistan.

Application

Once a task order, notice of funding opportunity, or request for proposal is released, the next stage is to put together a proposal. Some useful terminology for this stage includes:

Level of effort: Abbreviated to LOE, this is information that shares the amount of the labor and staff time that will need to be put into a project. Estimations around this will often be required as part of a proposal.

Key personnel: When putting together a proposal, USAID will ask for information including the names, résumés, information on past employment, and biodata for the individuals who will take up key roles, such as the chief of party, should the organization be awarded the funding. If these people were to change during the course of the project, USAID approval would be needed. The opposite is nonkey personnel — staffers or contractors that can be replaced throughout the project without USAID approval. Minimal information on these staffers is required. The classification of staffer is important as USAID has specific rules around the pay and benefits that can be given to certain staffer groups.

Third country national: Abbreviated as TCN, this is a person who is not from the United States and working on a USAID project in another country that is also not their home country.

Cooperating country national: This is a person hired locally for a USAID-funded project. In contrast to this, a foreign service national, or FSN, is a local member of the team employed within one of the USAID missions.

Federal acquisition regulations: These are the U.S. government regulations for procurement that all federal executive agencies must adhere to when producing services and goods. This only applies to contracts. Grants and contracts must follow the Code of Federal Regulations. 

Agency for International Development Acquisition Regulations: Abbreviated to AIDAR, these refer to the USAID-specific regulations for procurement contracts. This might include contracting policies as well as information on various procedures, processes, provisions, and clauses.

Update, April 25, 2022: This article has been updated to reflect the number of RFIs.

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