USAID pushes back against criticism of A&A strategy

The U.S. Agency for International Development has rejected criticism of the way it is developing a new acquisition and assistance strategy. But it said that a staffing crisis has stifled the organization’s ability to deliver effectively on its vision for localization. Earlier this week, Devex reported that some development experts were concerned about delays to the new A&A strategy, initially planned for release last summer. There was also criticism that there was not enough public consultation during its development. And there were questions as to whether the agency was burdened by too much red tape and an aversion to risk to realize Administrator Samantha Power’s aspiration to localize development. The A&A strategy, first launched in 2019, has come to be a crucial component of the way USAID does business. It now guides the spending of about 80% of the agency’s funds and some development experts believe that the “refreshed” document will shape the future of U.S. foreign aid for years to come. Yet delay over the release has raised concerns among some in development that it may fall short of expectations. A spokesperson for the agency did not say when the new strategy will be made public, only that it will be released “soon.” The spokesperson suggested the delay may be due to efforts to ensure that “the A&A Strategy and the associated implementation plan address the concerns of our staff and our partners.” Localization USAID said it has been taking steps to meet its localization goals. It pointed out that in 2022, more than 35% of new awards went to collaborative approaches to engaging with new partners, such as the co-creation of projects, compared to 18% four years ago. Since 2019, the agency said it has made awards to “new, nontraditional, and local partners valued at more than $1 billion.” The spokesperson also said that it has made progress on expanding the pool of who gets money from the agency, with 15% of all contract dollars going to American-based small businesses, adding that the agency had removed a $5 million ceiling on restricting awards to local partners for assistance contracts. USAID told Devex this week that it was committed to tracking its localization progress. “In March we will publish our first progress report,” the spokesperson said in an emailed response to questions. The report will contain data from last year on “direct local funding, separate reporting on government-to-government obligations, and the final definition for the indicator that will track practices that create space for local leadership across the procurement process and the program cycle,” the agency said. The new A&A Strategy will have indicators to monitor how localization is implemented in its execution plan, the agency promised. ‘Staffing crisis’ But USAID said it was being held back on all fronts by the number of contracting officers it has. “USAID is facing a contracting officer staffing crisis,” the spokesperson told Devex. Over the last five years, on average, USAID staffers awarded nearly $80 million compared to about $15 million that their colleagues at the Department of Defense have worked on. That is five times more than their counterparts, the agency said. “As the agency looks to work with more local partners, it lacks the … staff to be able to do the work,” the spokesperson acknowledged. “The situation is exacerbated by the fact that local partners are typically smaller and not set up to manage large awards, leading to many more awards being necessary to accomplish the same objectives.” The agency said that the new A&A strategy will tackle this challenge by making the awards process less complex and provide access to the process in languages other than English. The agency is hoping such moves will help reduce the burdens on its staff. “The A & A Strategy’s emphasis on streamlining and automating aims can support localization by freeing up staff time to allocate more attention to working with local partners,” the agency said. Inclusive approach The agency disputed criticism that it had not done enough to consult the public in the process of developing the new A&A strategy, arguing that it has been inclusive, incorporating feedback from its own staff and outside organizations. “Last year the Agency held more than 15 partner events where the key objectives of the A&A strategy were shared and input was received from the partner community,” the spokesperson said. Also, the agency used answers from a 2022 survey of organizations that had worked with USAID to inform its A&A strategy, they said. USAID also engaged with its internal experts and its staff around the world for their input on the strategy. “These consultations allowed staff to identify successes, challenges, and opportunities for the refreshed strategy,” the spokesperson said. Risk on programs, less on money Tessie San Martin, CEO of FHI 360, a top recipient of USAID funding, told Devex recently that she was skeptical USAID had raised its risk appetite, a key shift needed to expand the pool of organizations it can work with. USAID said there was a new “Risk Appetite Statement” to help guide the agency’s staff on ways to expand their levels of risk on programs. The agency maintained that it has a low appetite for “fiduciary risk” but rejected the idea that this will limit innovation. “A low appetite for fiduciary risk doesn't mean USAID shouldn't work in new or different ways. It means we should have a keen understanding of the context, and look to proactively identify, analyze and mitigate risks,” the spokesperson said. The agency said that it was instituting a new category called “operational risk” that it says will help the agency to work with their partners to strengthen their systems to prevent fraud, waste, and abuse. “We are all in on our goal to put local actors at the center of our work, but we also know that changing systems and cultures doesn’t happen overnight,” the agency said.