USAID takes broader view of local procurement

WASHINGTON — Officials who have been involved in multiple efforts to improve the U.S. Agency for International Development’s contracting and grant-making processes say they are trying to learn from past experiences — and past mistakes. As USAID undergoes a broad restructuring under Administrator Mark Green, the agency is hoping to build on earlier attempts to direct more resources through local organizations. The previous administration’s “local solutions” agenda set a top-line target for local spending — 30% — which it then struggled to achieve. But Green’s team says they are taking a broader view of how procurement fits into the entire spectrum of program strategy, design, award-making, and implementation. “The type of work that we are going to be looking for in-country strategies will mean you need to absolutely be engaging with local partners.” --— James Richardson, assistant to the administrator, USAID “We think ‘local solutions’ was quite successful in doing a number of different things, particularly really driving us to think about local ownership and sustainability,” said Roman Napoli, deputy coordinator for USAID’s transformation task team. “In some instances, the approach didn't drive us to good development outcomes, and so we needed to make sure that we always kept the real goal in sight,” he said. The current approach appears to take a more favorable view of the role that large international organizations and contractors can play in helping to build the capacity of local partners in the countries where USAID operates. Instead of setting a specific target for local spending, the agency plans to begin counting the number of local awardees and local subawardees international NGOs and contractors work with during the implementation of their projects, Napoli told Devex. “Right now, those things are not counted. And so those large NGOs don't get the credit they deserve for the capacity building that they're actually providing, and we've always found that it's kind of a gap in this conversation,” Napoli said. Asked whether this information would be used as criteria for making award decisions in the future, Napoli said the intention was more to get a better accounting of what international organizations are already doing to incorporate local partners into project implementation. “While we don't have a target — we're not recreating the 30% [goal] or setting a 50% local target — it is still a priority. We're not walking away from wanting to work with local partners, and so we do need to capture that information so that we can continue to prioritize that,” said James Richardson, an assistant to the administrator and coordinator of USAID’s transformation task team. “What this allows us to do is say, ‘while the contract went to Tetra Tech or to Chemonics, the actual work was performed by local partners,’ and we can count that and be able to roll up that data and report on the fact that we are continuing to expand the diversification of our partner base and expand our local partners,” Richardson said. Building self-reliance The previous administration’s “local solutions” approach drove a wedge between some of USAID’s implementing partners and former administrator Rajiv Shah, who notably warned that USAID was, “no longer satisfied with writing big checks to big contractors and calling it development.” “We can't just come in and start swatting people and say, work better. We have to offer them a better solution first,” Richardson said. Alan Chvotkin, executive vice president and counsel of the Professional Services Council, which represents government contractors, told Devex that counting these local partnerships could “help counter the misperception that American firms are not helping countries or local entities on their ‘journey to self-reliance,’ when, in fact, our member companies have demonstrated a long and storied history of partnering with local development actors.” “Fortunately, USAID already has most of this information,” he added. While the agency will forego setting a specific local procurement target this time around, a number of policies and strategies this administration has introduced, or is currently formulating, are aimed at increasing the role of local partners in project implementation, according to the officials. USAID’s acquisition and assistance strategy launched in December 2018, and the agency’s new policy framework, which Green launched last month, are both oriented around the administrator’s vision of aid that builds self-reliance, they said. “When we talk about the journey to self-reliance and helping partner countries become more self-reliant, it's impossible for us to be straight-faced in that conversation if we're not developing local partners and local capacity,” Napoli said. The agency is also in the process of revamping all of its country development cooperation strategies, which it aims to have completed by the end of 2020, Richardson said. “It will be very clear that we are looking to build local capacity and commitment. Now we're not going to say in there you have to work with x [number of] local partners, but the type of work that we are going to be looking for in country strategies will mean you need to absolutely be engaging with local partners,” he said. In addition to looking at the utilization of local awardees and subawardees in its grants and contracts, USAID plans to fulfill a few other promises it has made to its contracting staff. One of those is to hire more of them — a commitment Green planned to signal at a contracting officers’ conference on Monday. Another is to create a New Partnerships Initiative, which is meant to help USAID’s bureaus find and work with new partners in order to broaden their base of local implementing organizations. The agency’s procurement reform efforts are part of a larger restructuring process at the agency, which includes the creation of new bureaus and positions. Richardson said that at least some of these could be stood up by late summer.