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Center for American Progress

RELEASE: For USAID Procurement, Local Spending is Better
Press Release

RELEASE: For USAID Procurement, Local Spending is Better

Washington, D.C. – Given the levels of funding involved, it is no surprise that from its inception procurement reform at the U.S. Agency for International Development, or USAID, has been contentious and that there have been a series of distortions around its rationale, goals, and efficacy. Today, the Center for American Progress released a report analyzing USAID’s initiative to direct more of its program funding around the globe to local partners in the countries in which it works.

“The bureaucratic battle over where USAID spends its dollars has enormous implications for the poorest of the poor. Rarely has something so seemingly arcane carried such important real world consequences,” said Casey Dunning, Senior Policy Analyst for the Sustainable Security and Peacebuilding Initiative at the Center for American Progress. “USAID must continue expanding its local procurement efforts with partner governments and local NGOs and businesses.”

The report recommends that USAID focuses on six distinct areas to further institutionalize its reform effort and ensure that local procurement reform achieves development impact before 2015:

  • Clearly define the goals of local procurement reform. If USAID’s goal is ultimately to have every country graduate from the need for U.S. foreign assistance, developing the capacity of local governments and organizations is a logical step toward self-reliance.
  • Make the data around local procurement reform efforts more transparent. To the furthest extent possible, USAID should publicize information about its risk-assessment processes for both governments and local organizations.
  • Build local procurement plans into contracts with traditional donors. USAID currently has no way of tracking the local subgrantees of contracts awarded to international implementers, and it needs to develop this capacity.
  • Ensure staffing and training needs keep pace with reforms. USAID needs to effectively prioritize its training and personnel development so that field staff are as comfortable working with local groups as they are international contractors.
  • Focus on the politics behind local procurement reform. Local procurement efforts carry a number of benefits, including lower costs and greater potential impact. Both development experts and fiscal hawks should support procurement reform because it contains a built-in exit strategy for successful programs. Yet USAID still needs to broaden political support for procurement reform.
  • Use local procurement reform to be more selective. The screens applied during the risk-assessment frameworks for procurement reform can also be effective in identifying where the United States should direct assistance resources in the first place.

By better defining the rationale behind procurement reform, increasing transparency, and using current mechanisms to expand its partner base, USAID can greatly increase its partnerships with local institutions while also building support for this critical reform within the U.S. development community.

Read the analysis: Is Local Spending Better?” by Casey Dunning

To speak with an expert on this topic, contact Anne Shoup at 202.481.7146 or [email protected].