USAID issued guidance to contractors, grantees as shutdown loomed

Senate Majority Leader Harry Reid, U.S. President Barack Obama, and Speaker of the House John Boehner. Photo by: Center for American Progress Action Fund / The White House / Republican Conference

In the hours before U.S. lawmakers reached a last-minute deal with the White House to fund the government for the remainder of fiscal 2011, development aid contractors, grantees and cooperative agreement recipients were left wondering what the potential hit to their operations would be. For organizations partnering with the U.S. Agency for International Development and other federal agencies, the answer was unclear, at best.

As late as Friday, April 8, USAID was in the process of determining mission-critical and non-critical contracts and staff, a source close to Devex said. The agency planned to have at least one contracting official available in each overseas mission to field questions about the status of programs in case of a government shutdown, Devex learned.

USAID headquarters is using three criteria to determine critical and non-critical contracts. For contracts to continue operations, they must meet the following criteria:

  1. They must have already-allocated USAID funds.

  2. There must be adequate support in the field to physically continue the funded activity.

  3. There must be adequate support from USAID to provide oversight.

Organizations that do not meet these criteria would have been informed on Monday, April 11, about how to temporarily halt activities. USAID planned to post more specific guidance for contractors by close of business Friday, April 8, sources told Devex before U.S. lawmakers reached a deal with the White House that averted the shutdown, which would have occurred midnight that day.

According to April 7 guidance from USAID’s chief operating officer, existing contractors that have enough USAID funds in their coffers at the time of a shutdown can continue operations. However, the agency also noted that contracts running on previously obligated funds can continue operating “unless the Operating Unit [USAID] cannot provide ‘adequate oversight of contract performance’ during a shutdown period or there is no need for the supplies or services during this period.’” The note continued that “if adequate monitoring of contractor performance cannot be provided, suspension or reduction in performance of non-excepted services should be considered if authorized by the terms of the contract.”

Few details were publicly available Friday about the extent to which USAID operating units would be available to provide such oversight in the event of a shutdown. A government estimate dated April 4 said that of the 2,011 direct hires in USAID’s Washington headquarters, 449 would be retained in the event of a shutdown.

In its published guidance, USAID provided a schematic of how its partners could begin to determine whether to they would be permitted to continue operating or not.

Graphic by: USAID

For organizations that have received USAID grants and cooperative agreements, USAID’s guidance notes – similar to its guidance for contractors – that “recipients may continue their activities under an existing award if they have adequate funding previously obligated.” Further, USAID will not enter into new grants and cooperative agreements during the period of a shutdown unless the award is necessary for emergency activities or is critical to the U.S. foreign affairs mission.

Read more about the U.S. aid budget news.

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