USAID: The Roller Coaster of Highs and Lows

Published: May 01, 2019

USAIDResearch & Development

On January 25, 2019, President Trump signed a Continuing Resolution that would re-open the federal government after a historic 34 days of being shut down. This was a promising start that would lead to an aggregate of events, from ending a historic shutdown to a declaration of national emergency. It is without a doubt that the focal point was taking care of interior problems, with little focus set on business outside of the US. Unfortunately, when the United States is responsible for providing foreign assistance, the house needs to be well kept on the exterior too.

The U.S. Agency for International Development (USAID) has been under the radar and has not generated a lot of noise since, but like the rest of the agencies that were shutdown, suffered an impediment. 

Though, foreign aid may not be a priority for the government during a shutdown, it is vital to countries recovering from a disaster, receiving medical, food and financial assistance and much more. The necessity for communication is also crucial in achieving the US’ foreign policy and development objectives, which, unfortunately declined during the shutdown as half of 3,100 staff members were furloughed.  The shutdown negatively affected business outside of the US and foreign aid since programs were delayed and only excepted work was allowed to be performed. Not to mention, the reliability of the US in the aid of foreign countries raised a question on whether a country that cannot come to an agreement is in need of more help than the developing countries. Richard N. Haass, Council on Foreign Relations President stated in an interview, “This sends a message to allies that they’re somewhat on their own. It sends a message to adversaries, or would-be adversaries, that again, that you’ve got a more unpredictable America.”

USAID, like many agencies, is still recuperating from the setback. Solicitations, Awards, and other significant milestones have seen an uptick in delays and even cancellations.  A number of contracts that were due to expire, were extended in order for a follow-on contract to ensure uninterrupted services. 

Below is a list of USAID tracked opportunities that have been or may have been affected in result of the recent government shutdown:

Only a total of 5 awards were reported publicly to have been made in the month of March 2019.

Although the shutdown did remind us of the importance of USAID and some downfalls, there are positives of doing business with USAID.  According to the USAID Fiscal Year (FY) 2020 Development and Humanitarian Assistance Budget Request, “The President’s Request of $6.3 billion for humanitarian assistance (including resettlement) would allow the United States to remain the largest single donor to crises around the world. Combined with carryover resources, the average program levels for 2019 and 2020 would maintain the highest annual U.S. humanitarian assistance programming ever.” If approved, this would be a great title to continue to hold and shows the generosity and importance of humanitarian assistance to the U.S. Another promising statistic to look at as well, if you are an 8(a) vendor, is the increased business that is being performed by 8(a) vendors. Since 2015, the amount of business awarded to 8(a) Set Asides has gradually increased from 1.165 to 3.72% in 2018, which equals a total of $406,800,000 in 2018. Lastly, the agency publicly reports updates for requirements on a quarterly basis via USAID’s Business Forecast. Most recently, on March 21, 2019, USAID hosted its FY 2019 2nd quarter Business Forecast conference call. Responses to questions submitted, as well as a recording and transcript of the call were provided. This is a great tool with a lot of value to vendors.

In contrast, The Washington Post, states foreign aid accumulates to one percent of the entire federal budget. Furthermore, President Trump has not shied away from sharing his thoughts on the FY19 foreign aid budget of $54.4 billion being too high, stating in a cabinet meeting held at the White House on January 2nd, 2019, “It's $54.4 billion, which is by itself a lot, but in foreign aid they want 12 billion over the $54 billion. Think of it. We give $54 billion, a lot of it because they want to give it. They don't even know who they're giving it to. In many cases, people don't ever - don't even know the name of the country. They know nothing about the country, and yet - so they're going to give 54.4 billion in foreign aid but they want 12 billion more than that in foreign aid but they won't approve $5.6 billion for a wall that's going to pay for itself almost on a monthly basis.” Attempt after attempt, the Trump administration has made many proposals to cut foreign aid. Last year, USAID and the Department of State faced deep budget cuts in order to have the government up and running which was rejected by the omnibus. The administration also proposed a cut to the FY19 International Affairs budget during the recent shutdown and was rejected, which the U.S. Global Leadership Coalition states, “if enacted, would have taken funding back to levels not seen since 9/11 (inflation adjusted).”

Although there are positives in working with USAID, contractors are left with many questions: Do the positives outweigh the negatives? The discretionary budget has seen a substantial decrease since 2017, dropping slightly over 60% since 2017. What would another shutdown mean for the US and its foreign aid? And, lastly, is there a way that work outside of the US cannot be interrupted in order to maintain respectable and reliable relationships with developing countries and leave us without work and pay?