USAID pushes for more competition, less onerous regulations


USAID is seeking to increase competition for its contracts (Wally Santana/Associated PREss)
December 25, 2011

The U.S. Agency for International Development is seeking to increase competition for its contracts and make its programs more accessible to small and disadvantaged businesses as part of a larger agency-wide reform effort.

Concerned that a reduction in contracting staff has led to an increased reliance on a fairly small group of contractors and nongovernmental organizations, USAID has made changes to its procurement program a key part of its reform.

In its plan for change, the agency says it is “falling short” in accessing the full range of talent in both U.S. businesses and organizations and those in developing countries.

USAID has started by promoting more competition within its programs, particularly focusing on setting aside more awards for small and disadvantaged businesses.

The agency has established a review board that looks at ways to make large contracts more accessible to small businesses, such as by splitting them into smaller pieces, said Aman S. Djahanbani, USAID’s chief acquisition officer.

“Broadening our partner base ... just makes good business sense, and it furthers sustainable development,” Djahanbani said.

At the same time, the agency is trying to work with more of the organizations and companies that are local to a given country. Littleton Tazewell, senior adviser to USAID’s general counsel for implementation and procurement reform, said the agency often relies on intermediaries — such as U.S.-based contractors or international nongovernmental organizations — to work with local bodies.

“The idea here is to increase our direct engagement with local organizations,” said Tazewell, who said a deeper understanding of local organizations will help USAID craft better solicitations.

The agency also is seeking to make its regulations and rules less burdensome to encourage more companies and organizations to compete for contracts and grants.

USAID acknowledged that some larger contractors or NGOs may see reduced work as a result of its procurement reform moves.

“Our partners need to realize that there is more competition,” said Djahanbani. “However, they definitely have a role to play — maybe a different role.”

For instance, he said, in some cases a local organization could serve as the prime contractor while an international or U.S.-based organization could function as a subcontractor.

Tazewell said USAID has engaged the companies and organizations it frequently uses as it reforms in an effort to identify their particular problems.

Still, USAID is only about 18 months into what it expects to be a five-year process, Tazewell said.

“We’re going to trip and make some mistakes along the way, but our expectation is at the end of that five-year process we’ll be a much better organization,” he said. “We will have a structure [and a] regulatory framework that allows for a broadened partner base that’s both local- and small business-oriented.”

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