USAID has set a 'bold' new A&A strategy. But can it implement it?

A lot was at stake in USAID’s new acquisition and assistance master plan. The strategy — A&A in popular parlance — was finally released earlier this month. It is viewed as very important by USAID’s partners because it is the blueprint for how the agency gives grants and awards contracts and the way it spends more than 85% of its funding. The document offers the clearest signal yet of how Administrator Samantha Power wants to run the agency. And even more substantially, it provides the most concrete foundation for how the agency plans to deliver on Power’s big vision for localization. The question, then, is what those who work in development think about the new strategy. Does it create a pathway toward localization? Will it cut red tape and reduce the burden for new local groups to come into the USAID system? Does it deal with the staffing issues that the agency says have stifled its ability to deliver? Devex spoke to development professionals to get their perspectives on the new strategy. The localization agenda The strategy will help the agency get closer to delivering on localization, said Justin Fugle, head of U.S. government policy at Plan International USA, one of the largest NGOs delivering USAID services. “It's very positive,” Fugle, who is also a co-chair of the Modernizing Foreign Assistance Network, or MFAN, a coalition of global development experts, told Devex. “This is really essential to sending the right signals that they want to change the way they do business. And I think that they've got a lot of good steps in here.” Fugle said he was encouraged by the agency’s decision to ring-fence funding for local organizations, through what USAID called “local-only competition.” The move will help build up local partners’ ability to work with USAID and overcome the disadvantages they may have when competing with bigger institutions that have a legacy of work with the agency. “That's a very concrete step, one of the first times we've seen it in writing,” Fugle said. Walter Kerr, the executive director of the advocacy group at Unlock Aid, who had criticized the agency in the past for a lack of clear targets on localization, was also encouraged by the new A&A strategy. “If the adage is ‘measure what matters,’ USAID is taking a bold step forward with this strategy and proposed implementation plan by setting just a few clear priorities,” he told Devex. Kerr said the agency laid out clear metrics on the percentage of obligations to local partners, the number of new partners USAID will aim to work with, and the percentage of fixed-price contracts and fixed-amount grants. How the agency plans to track “how it plans to spend tens of billions of dollars every year could change agency business practices in a big way,” Kerr said. Bill O’Keefe, the executive vice president for mission, mobilization, and advocacy at Catholic Relief Services, said how the agency measures localization will be critical. The strategy was “solid,” he told Devex but the advocates of more localization will have to stay on the agency to make sure they deliver. “We're gonna need to hold them accountable to not cutting any corners, so that… local groups play a larger role in their own societies and in the development process,” he told Devex. Staffing One of the key issues that USAID had complained about was that staffing at the agency was slowing down its ability to deliver on localization. Announcing the new A & A strategy, Power described the agency’s workforce as “depleted” and promised a hiring spree going forward. The focus on improving the workforce, which forms the bulk of the new strategy, was “notable,” said Ruth Rhoads Allen, president and chief collaboration officer at CDA Collaborative Learning Projects, a Massachusetts-based advocacy organization “Equipping more local staff with tools designed for purpose is very complementary to other moves to shift power to local actors,” she told Devex. The workforce issue is critical to the agency’s ability to deliver on its agenda, particularly on localization, said Erin Collinson, director of policy outreach at the Center for Global Development, a major development think tank. “If you believe your workforce particularly in this area to be depleted or just like greatly overtasked, your goals and ambitions are not going to be as well served,” she told Devex. USAID’s decision to empower its foreign service nationals — the agency’s locally employed staff — was crucial to reduce the burdens on its workforce as it moves toward a more localized agenda, Collinson said. “Those are the people that have to build relationships with new partners … particularly local partners and help to nurture those and bring those into more full-fledged partnerships,” she said. In its new strategy, USAID plans to grow the number of local staffers with the authority to administer contracts to 38 from the current 19 by the end of the year. “That's one of the things I'm happiest about,” Fugle said about the decision. He had told Devex in the past that the agency was underutilizing this key resource that had proved itself more than competent in running USAID’s global missions during COVID-19 when the American staff had to be evacuated back home. “This is one of the things they can do to help solve their contracting officer staffing crisis,” he said. “I was very happy to see them say, ‘Look, we have all these great people already in the missions and we're underutilizing them,’ and then they put this very specific goal of doubling the number in just one year. So I hope they find that it works out very well and that they will continue to expand it after that.” Collinson said the agency would need to also be mindful of the fact that localization efforts could put more pressure on its staff. “The actual work of the agency to get to these partners, to try to bring them into the fold, to help manage these awards, that isn't necessarily less work,” she said. “There's presumably an upfront cost with that. So I just wonder to what extent you can do both at the same time.” A definition of local The agency has set a well-known target of 25% of all funding going to local organizations. But as the new strategy takes shape, a lot hinges on what exactly constitutes “local.” Catholic Relief’s O’Keefe said there is still more work to be done on how to define local, particularly to avoid existing partners setting up subsidiaries in other countries to get around the rules. “I don't think we're there yet,” he told Devex. “I understand that there's some technical [issues] and complications in using a more robust definition. … But I think if this effort results in the subsidiaries or franchises of international groups masquerading as local and counting as local, I think it really will be a waste of time and effort.” Rhoads Allen said the agency’s new policy to strengthen its work with local partners and its initiative to attract new partners will help it to reach its goal. Yet, the A&A strategy itself still has challenges when it comes to defining clearly what’s local. “I don't think the agency yet has fully gotten its arms around what the detailed definitions are that would help put the acquisition strategy into the 25% metrics. But there's a foundation for doing that,” she told Devex. Fugle said he was struck by what Power said herself on what constitutes local. “The administrator has a phrase in here which I took note of,” he said. “She says organizations based in the countries where we work. That's what she means by local. That's what she says in this strategy. And I think she's right. They need to be based in the countries where the project is happening.” For Kerr, the agency has taken a significant step forward. “It’s made diversifying who the agency works with, getting more funding to local organizations, and increasing the share of funding that pays for performance as the only spending indicators the agency proposes to track,” he said. “Now comes the hard part: implementation. Robust transparency at every step of the way will be essential to ensuring that USAID lives up to these commitments,” Kerr said.