USAID uses new contracting technique to try to lower barriers to entry

A pile of papers. A new type of procurement process is helping USAID attract private sector organizations that might otherwise steer clear of government bureaucracy. Photo by: Adam Clarkson / CC BY-ND

On Friday the United States Agency for International Development started accepting applications for a $30 million grand challenge calling on innovators to submit ideas to combat Zika and “the disease threats of tomorrow.”

“To get ahead of infectious diseases like Zika, we need to move quickly to find and scale new tools and transformative solutions," USAID Administrator Gayle Smith said in a statement.

The grand challenge is an addendum to the to the USAID Development Innovation Accelerator Broad Agency Announcement for Global Health, and is an example of how the agency is increasingly turning to a contracting technique used elsewhere in the U.S. government to see if the model might work to involve new actors in addressing development challenges.

As USAID looks to partner with a more diverse group of actors, the agency is contending with regulatory restrictions that can be cumbersome or limiting. The Broad Agency Announcement, or BAA, may be a way to address that challenge. The BAA is a new way for the agency to communicate with partners to design solutions before determining what procurement tool may be the best fit.

Accessibility is one of the goals for the BAA, Bruce McFarland, the USAID Global Development Lab's chief of operational innovation, told Devex. He noted that it is an alternative to more traditional solicitations like RFPs — requests for proposals — the kinds of acronyms and procedures that can scare off new actors looking to partner with the government on development challenges.

About 18 months ago, McFarland had a conversation with colleagues about how they might use the BAA model to try a different approach to acquisition. Within 30 days, the agency had its first BAA: the Development Innovation Accelerator. 

“Non-traditional actors just don’t have any patience for putting together a 30-page proposal,” McFarland told Devex. “With a BAA, all you have to do is a statement of interest, with easily transmittable information about what your organization is, what you would bring to the table if invited, and it just makes the process easier for people who would like to participate.”

One of the early BAA’s for USAID, Reducing Opportunities for Unlawful Transport of Endangered Species, or ROUTES, brought new groups like the International Air Transport Association together with longtime USAID partners like the World Wildlife Fund, he said.

The BAA helps USAID attract private sector organizations that might otherwise steer clear of government bureaucracy, said Douglas Lavin, vice president of member and external relations for the International Air Transport Association. The ROUTES BAA offered IATA the opportunity to have a series of meetings with NGOs and other stakeholders to explore how to collaborate to address the challenge of illegal wildlife trade, he added.

“We quickly identified the particular expertise of each stakeholder and then organized ourselves around a set of objectives to be led by the best positioned entity for that task,” Lavin said.

BAA announcements tend to emphasize co-creation, co-design and co-investment. While most activities coming out of these collaborations are in their early stages, the USAID representatives said this approach is gaining traction. Most BAAs continue to come from the U.S. Global Development Lab, but a range of other missions and bureaus are involved in the 11 planned BAAs for the 2016 fiscal year, said Mark Walther, deputy director of Washington operations for USAID, in an “Ask the Procurement Executive” call.

Among those planned BAAs are research and development awards for climate resilience in Bangladesh, higher education in Egypt, and protection of vulnerable groups in Haiti.

The increasing use of the BAA reflects the way USAID is trying to reform its procurement process and support local solutions, Stephanie Fugate, a branch chief at USAID’s Office of Acquisition and Assistance, told Devex. It gives contracting and agreement officers at the agency more flexibility and the ability to better understand a particular issue.

“A BAA is not designed to instrument or designed to budget. It’s designed to solution,” she said. “The transparency and collaboration of the process is key to ensuring we’re on the right track and working together toward the same goal.”

The idea of the BAA is that it allows partners to develop better solutions together than they could have developed alone, said Lynlee Tanner Stapleton, a U.S. Global Development Lab innovation advisor at USAID.

“We have lots of experience with more competitive methods and the BAA has helped us explore the collaborative realm,” she told Devex.

USAID hasn't completely removed competition from the equation. The agency still evaluates statements of interest to assess the merit of the ideas before inviting an organization to participate. For example, out of nearly 3,000 ideas received as part of the Saving Lives at Birth BAA, 53 finalists were invited to present their ideas in Washington last July.

Often those conversations are led by professional facilitators in an effort to create the structured environment necessary to enable co-creation.

A BAA  can lead to the use of a variety of different contracting instruments, including a contract, grant, cooperative agreement, a global development alliance agreement, development innovation agreement, or memorandum of understanding.

Of course, there are limits to the BAA. For example, it can sometimes be difficult for the agency to convey to organizations that the BAA is not an opportunity for them to push a particular agenda, said USAID officials. And while some of the conversations are virtual, many are in person. USAID does not pay for participants to travel to Washington, D.C., for these meetings, so the cost can limit the involvement of some organizations that might have expressed interest.

BAAs work best for organizations that can benefit from the flexibility of the relationship rather than organizations that know exactly what they want to achieve, how much money they want to spend, and who they want to partner with, McFarland said.

The BAA demonstrates the value in making decisions as late into the journey as possible, he said and it is raising awareness within the agency that there are opportunities to engage beyond the traditional procurement mechanisms.

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About the author

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    Catherine Cheney

    Catherine Cheney is a Senior Reporter for Devex. She covers the West Coast of the U.S., focusing on the role of technology, innovation, and philanthropy in achieving the Sustainable Development Goals. And she frequently represents Devex as a speaker and moderator. Prior to joining Devex, Catherine earned her bachelor’s and master’s degrees from Yale University, worked as a web producer for POLITICO and reporter for World Politics Review, and helped to launch NationSwell. Catherine has reported domestically and internationally for outlets including The Atlantic and the Washington Post. Outside of her own reporting, Catherine also supports other journalists to cover what is working, through her work with the Solutions Journalism Network.