USAID business forecast: Q3 2018

CANBERRA — The downward trend in the number and value of forecast opportunities listed with the United States Agency for International Development continued this quarter. At the associated business call, which took place in Washington D.C., on June 28, the agency highlighted the growing importance of small business partners and a direction to encouraging self-reliance among the countries they are currently supporting. Despite a slowing in opportunities, the third quarter of 2018 has seen some new and changing business opportunities as well as clarity in changes that will impact procurement practices within the agency. In our updated tableau interactive for this quarter, the changing trends from the first quarter of 2015 can be reviewed. Here, we explain the key messages highlighted in the data. The value of opportunities In the third quarter of 2018, 185 forecast opportunities are listed with a maximum combined value of $8.6 billion. In the analysis last quarter, a quarter-on-quarter decline in the value of opportunities was identified as out of line compared to previous years. It was predicted that this quarter would see a rise in value. But again, the business forecast bucked the trend. The 21 percent decline in the value of opportunities sees this as the lower value of forecast business opportunities since the first quarter of 2015. The number of opportunities dropped 10 percent quarter on quarter, and is the third lowest in data Devex has made available. Opportunities by region The declining number and value of opportunities this quarter makes it difficult to identify “winning” regions. But despite the overall decline in opportunities, there are some seeing a boost. In Colombia, the forecast release of the $100 million USAID Lands for Property Activity has seen the value of opportunities in the country increase 400 percent from the past quarter — the largest percentage increase. Macedonia has seen the second largest quarter-on-quarter increase with the value of opportunities growing 386 percent from $4.1 million thanks to a rise in value for the Governance Performance Improvement Activity as well as a newly released $10 million opportunity — Improved Citizens Awareness. The third quarter of 2018 has seen the largest value in opportunities available in Macedonia since the country appeared in the forecast during the first quarter of 2017 — and this quarter sees them exceeding their average opportunities value of $11.2 million. Afghanistan and the Democratic Republic of the Congo also saw large boosts in forecast opportunities this quarter — with the rise in the value of opportunities exceeding 170 percent in both countries. The Afghanistan Competitiveness for Export-Oriented Businesses Program, first listed in the first quarter of 2018, has tripled from a project worth up to $100 million to one worth up to $300 million. And the BEHTAR program that aims to improve health outcomes in the region, is newly listed opportunity adding another $300 million in opportunities this quarter. In DRC, the newly listed sustainable WASH service delivery project provides a potential $100 million boost to businesses providing development services in this region. A total of six opportunities are listed for this quarter. Other areas seeing a boost in the value of listed opportunities are Moldova (122 percent increase), Turkmenistan (83 percent increase), Ethiopia (50 percent increase) and Vietnam (43 percent increase). Cambodia has a newly listed opportunity after going missing last quarter, worth $25 million: All Children Learning – Cambodia. And Libya and Yemen both appear for the first time this quarter in the data dating back to the first quarter of 2015. In Libya, two new opportunities are available both valued at up to $50 million — Local Governance Civil Society and Public Finance Management. In Yemen, a total of $35 million in opportunities are available supporting global health and water and sanitation. At the other end of the scale, Malawi has seen opportunities decrease 98 percent after a $25 million opportunity supporting higher education was removed from the forecast while Benin, Honduras, Kyrgyzstan, Madagascar, Myanmar, Rwanda, and Tunisia have disappeared from the forecast entirely. Opportunities by sector As is the case with opportunities by region, there are a few sectors seeing a boost in forecast opportunities despite the overall decline. After a large drop last quarter, agriculture and food security sees a slight increase in forecast opportunities this quarter increasing from $642 million to $651 million. Working in crises and conflicts as well as economic growth and trade both followed a similar trend — the latter saw with a 6 percent rise after a 53 percent decline. This sector was boosted by the tripling in value of the forecast Afghanistan Competitiveness for Export-Oriented Businesses Program. Democracy, human rights, and governance have seen forecast opportunities increase from $995 million to $1.4 billion thanks to two new global programs from the Bureau of Democracy, Conflict and Humanitarian Assistance — the Active Communities – Effective States (ACES) program and the annual program statement supporting ACES. Both opportunities are worth up to $300 million each. USAID explained in the quarterly business call that proposals for ACES search for solicitations will be opon until August 14 and is expected to have approximately eight contractors supporting the work — with five small business and three large. But projects supporting water and sanitation initiatives have seen the larger increase in value of forecast opportunities this quarter — growing 61 percent from last quarter. The newly listed sustainable WASH service delivery project in DRC headlined the $100 million for business opportunities in this sector. Small business update The data Devex has made available collating changes in the business forecast since the first quarter of 2015 shows that this quarter has seen an important peak — in the opportunities listed with a small business set-asides. Small business set-asides are opportunities exclusive to small businesses and may include the total or part of the award. And there are special opportunities for small businesses operated by service-disabled veterans and small disadvantaged businesses. This quarter sees a total of 23 opportunities available with exclusive opportunities for small businesses, increasing from 18 last quarter and 14 from the previous year. The ongoing importance of small business engagement as part of USAID’s business opportunities was highlighted in the business call for this quarter. Kimberley Ball, deputy director of the Office of Small and Disadvantaged Business Utilization, announced the launch of the Small Business Market Analysis Research Tool, a database listing small businesses that are currently working with USAID or would like to. “It’s a system where you can put your information directly into the database,” Ball explained. “We’re also asking people to tell us where they’re currently working, where they have worked — so we want to get a sense of your past experience both with USAID and with other organizations. And we’d like to hear about what contracts you’re already on.” The database enables USAID staff with a location for contracting and technical staff to quickly find and access small businesses with a focus on development — and improve their partner base. “We’ve already launched the database internally, so USAID staff know that this is a place to find capable, qualified small businesses,” Ball said. “We do remind staff though that this database is not an exhaustive list of all potential small business partners, and there is no requirement for you to enter your information in order to be considered for USAID work. But it is a tremendous opportunity to help us to get to know you better, and we believe this tool will make it easier for you to share your capabilities with the agency.” Jorge Dulanto-Hassenstein, from foreign operations within the Management Bureau’s Office of Acquisition and Assistance, also highlighted the need for USAID to continue seeking new small business partners. “We recognize that as our existing small business partners become more successful, they lose their status,” Dulanto-Hassenstein said. “We are continually looking for new small businesses to supplement our partner base.” And SB-MART will form an important role moving forward in finding and engaging small business partners. The status of procurement changes and reforms USAID has been engaging widely with USAID staff, partners, and the private sector on the Effective Partnering and Procurement Reform, and the quarterly business call provided an opportunity for an update on progress. Randy Tift, senior advisor with M/OAA, explained that key delivery milestones for the reform are set to be delivered during the summer and fall of 2018 — culminating in changes that will be announced late this year. “Interestingly, feedback from employees in the field, mirror many major themes of feedback that we've received from partners — from some of you,” Tift told business delivery partners. “It all centers on design and procurement timelines, some burdensome [and] bureaucratic processes, the need to engage new partners, and a need for more adaptive programming.” But there are already changes happening to procurement processes, as explained by Acting-Director of M/OAA Mark Walther. USAID’s acquisition and assistance planning guidance has been revised to include new strategic objectives of the organization. “First and foremost, the main reason for the revision really is to ensure that operating units are addressing reform approaches,” Walther explained. And this includes Administrator Mark Green’s goals to enable countries to reach self-reliance, advancing collaboration and co-creation, and broadening opportunities to enhance competition. Adjustments have also been made to the review process, with Green now responsible for reviewing acquisitions and assistance, with pre-solicitation value of $40 million and above, and revisions have been made to USAID’s pre-award risk assessment procedures to “prevent specially designated nationals, or SDNs, and blocked persons from receiving agency funds”. “Please note we’re undertaking this step,” Walther said. “We believe it can be easily undertaken, and this truly is a benefit both to partners and the agency in preventing these types of situations from possibly occurring, so we appreciate your cooperation in these efforts.” And additional changes have been made related to sexual misconduct and other forms of abuse. “This is a direct result of the administrator’s reaffirmation of USAID’s zero-tolerance policy of sexual abuse and exploitation earlier this year,” Walther said. “Simply stated, the contracting language stipulates that contractors must protect beneficiaries from sexual abuse and exploitation by contractor staff, and hold themselves to the standards outlined in the UN Secretary-General’s Bulletin entitled ‘Special measures for protection from sexual exploitation and abuse.’ The clause also includes steps the USAID contracting officer must take, should an incident of misconduct occur, including immediately reporting the case to the Office of the Inspector General.” The changes continue to demonstrate the importance of current and future potential partners to stay as up-to-date with USAID changes, in both opportunities and procurement practices that could make the difference between winning an opportunity and missing the cut. For further insights into the USAID business forecast, interact with our tableau visualization and delve into business opportunities by sector and region.