Working with USAID: Insights on budget and policy impacts from the Q4 business forecast

The fourth quarter release of the United States Agency for International Development business forecast on August 11, and its associated question and answer opportunity, revealed an aid program evolving daily under new leadership and budget restraints. A total of 183 opportunities are listed for quarter four of 2017, down from the previous two quarters, and they range in value from $8 to $14 billion. In quarter two, water and sanitation projects were high priority, but by quarter four, projects associated with crisis and conflict had become the top priority. Those include opportunities such as the $2.5 billion Support Which Implements Fast Transitions 5 project. Meanwhile, regional priorities have shifted from Kenya, Nigeria and Gaza Strip to South Africa, Mozambique and Afghanistan — including a $750 million HIV project in South Africa, as shown in our interactive feature for the budget forecast. USAID has said these business opportunities and associated budgets are subject to change as aid priorities and budgets are reviewed. New opportunities Despite the business forecasts being a work in progress, there are currently 20 new opportunities listed that are million dollar business opportunities — with two having budgets ranges between $50 and $100 million. The newly listed opportunities show a diverse regional focus, including Cambodia, El Salvador, Ethiopia, Indonesia, Madagascar, Morocco and Uganda. A sector analysis shows new opportunities have strong focus in the areas of global health and trade. A market initiative for the supply of health products in Madagascar and a global infectious disease detection and surveillance project are the two largest new opportunities, and business drawcard, in the current forecast. Opportunities lost Just as there are new opportunities for businesses to be aware of, there are also cancellations. The Empowerment and Inclusion Support Mechanism project, a global umbrella mechanism aimed at reinforcing the capacities of communities, NGOs and governments to provide services, protect and promote the rights of vulnerable populations, was expected to be a $100 million program. This program had been listed in the past two quarters with no information provided on the reason for the cancellation. And the Creating Economic and Employment Opportunities through Partnerships program, a $50 million project supporting economic growth and trade in Jordan, was the second largest project cut. Again, despite being listed for the past two quarters there was no explanation for the cancellation. Three $10 million programs were also cut — a global finance for development program, an environmental policy program for Sindh in Pakistan and a social dialogue program for Vietnam. How will the new budget impact forecasted projects? New USAID leadership and the proposed budget cuts are already showing their impact on work plans and directions of USAID. But how will that be reflected within the business forecast? “Decisions are still underway and we will update the forecast as soon as change is known,” USAID told Devex. “Given the ‘live’ feature, our goal is to allow partners to have the latest information.” There are already changes being reflected in the forecasts. The Performance Evaluation of Azerbaijan support to Agriculture Activity, an estimated $150,000 project providing agricultural management support, was cancelled due to the decreased budget for aid projects in Azerbaijan according to USAID. Changing aid priorities are also reflected in the forecast. USAID said it cancelled an environmental policy program in the Sindh region after its mission decided to redesign programs there. And the Feed the Future Marketing Scale project was cancelled as the requirement for a marketing to scale services was no longer present. “This was not an easy decision for USAID to make, as we know a lot of time and resources, including a significant amount of money, go into assembling a team and preparing a proposal, especially when they go longer than one and a half years,” USAID said. Many USAID projects nearing the end of their current cycle are also under a cloud. Some of these, such as the Caribbean Basin Security Initiative, have no plans to recomplete. Some projects, such as the Feed the Future Knowledge-Driven Agricultural Development project slated to end in 2018, have unknown futures. But others have seen positive news, including the Applying Science to Strengthen and Improve Systems, which will be redesigned with a focus on strengthening health systems. With the “live” nature of the forecasts, USAID’s business partners are currently receiving updates of budgets in a state of change as priorities are adjusted. Over the past quarter, a family program for Egypt has increased from a $10 million project to a $25 million project, disappeared and reappeared as part of daily updates. For many projects, USAID have said that despite being listed, they are still in development phase with budget information still being finalized and subject to change. How will the ‘global gag rule’ impact awarded projects? Which projects are impacted by the global gag rule — also known as the Mexico City Policy — and how this will impact the awarding of projects is a question of concern for potential business partners. USAID has developed guidance associated with the reintroduced policy, which blocks federal funding for NGOs providing abortion services or advocacy to decriminalize abortion, under their Standard Provisions for U.S. Nongovernmental Organizations. The updated standards includes a new section on “protecting life in global health assistance” and is applicable to USAID awards using federal funding primarily for international health activities with a primary purpose or effect of benefiting a foreign country. Forecasted business opportunities listed under the global health sector are likely to be impacts, and the provision applies whenever a supplier or partner is a foreign NGO. But USAID advises organizations to check provisions associated with opportunities to determine the applicability of the global gag rule, and they are currently working through a range of questions they are receiving on the policy to determine whether a further FAQ is required. Small business opportunities Business opportunities with USAID include a range of set-asides for small businesses, women-owned businesses, and those owned by veterans and veterans with disability. Small business opportunities in particular are strongly sought after opportunities for current and potential USAID partners. And opportunities are set to increase. According to USAID, up to three small business opportunities to be released by the Bureau for Democracy, Conflict and Humanitarian Assistance will be small business set-asides as well as the expected third phase of the Learning, Evaluation and Analysis Project. Further business insights The fourth quarter question and answers from USAID provide further insights into how the business forecast will change. Currently, there are many listed opportunities with large budget ranges. This includes the global infectious disease detection and surveillance project currently listed as an opportunity between $50 and $100 million. USAID plans to narrow ranges and provide tenderers with a better budget range to help in planning and bidding for projects. Recent opportunities have been listed with short turnaround times — between four to six weeks between postings and solicitation, which has been causing problems from responders. USAID is hoping to provide more notice, but it is dependent on the business areas responsible for managing the projects. The changes being made to the business forecast are aimed at assisting potential partners in being well-prepared to bid for opportunities. But a relationship with USAID and its business areas is still important to best understand the needs of USAID, recipient countries and expected outcomes of these projects. With a range of opportunities currently labelled as “TBD,” relying solely on the forecast could leave businesses a step behind the competition. For further insights into the USAID business forecast, interact with our Tableau visualization and delve into business opportunities by sector and region.