Can Administrator Power Avoid a $2,000,000,000 Mistake?
UPDATE: USAID revised its guidance in line with our recommendations. Thank you, USAID! While this welcome news came too late for some primes that had already firmed up their proposed consortia, this is at least a positive step that provides USAID a path forward for its future Global Health Supply Chain tenders.
Last month Administrator Samantha Power said all the right things when she pledged to diversify USAID’s partner base to bring far more innovation and results to the world’s largest aid agency. Now her team has the chance to make much-needed changes to a multi-billion dollar investment before it locks out new partners.
Let’s break it down:
The multi-billion dollar NextGen Global Health Supply Chain (GHSC) initiative is the USAID’s largest project, with the important goal of getting essential medicines to vulnerable people around the world. It is hard to think of a USAID initiative that requires more innovation and a diverse partner base to achieve its goals than this one.
Now one of its first phases is live on the USAID website, and while its title may be a mouthful – “NextGen Comprehensive Technical Assistance for Health Supply Chain and Pharmaceutical Management (CompTA), or RFP No. 7200AA21R00009” – the estimated value of $2-2.49 billion makes this a whopper of a public tender.
Last week, in response to an RFP Q&A, USAID provided the following guidance regarding which organizations major government prime contractors could subcontract:
“The offeror and each subcontractor that the prime requests to be approved at the IDIQ level must include a complete copy of its most current NICRA or other documentation from its cognizant Government Audit Agency (GAA).”
Remember, this isn’t just for the prime contractor that gets the work. The requirements will extend to all “each subcontractor.”
In our experience, these kinds of overly prescriptive requirements exclude all but USAID’s legacy partners and big contractors from competing. Very few small businesses, local organizations and other partners that have never worked with USAID in the past will be able to participate if the procurement isn’t updated. Do you have a NICRA or GAA-approved documentation?
While the underlying RFP was cumbersome for many smaller players to comply with in the first place, it at least provided alternative ways for organizations to demonstrate to USAID proof of their good financial standing in lieu of having a NICRA or GAA-approved documentation. With the new Q&A guidance, however, government prime contractors and their subcontractors are now confused: Do the alternatives outlined in the underlying RFP still apply? Or does this new Q&A language mean that those alternatives are no longer permissible and every organization involved in this bid must now produce a NICRA or GAA-approved documentation which, let’s face it, few smaller partners will be able to do?
Prime contractors don’t want to risk losing this big tender because they proposed to work with organizations that USAID would now consider “noncompliant.” We’ve heard through our coalition of innovators that in the few days since this new guidance came out, many prime contractors have told dozens of smaller partners that it is not worth the risk to include them on their bids, even though these are the very innovators and local organizations that Administrator Power says she wants to attract. In some cases, prime contractors have dropped as many as two-thirds of their partners and/or downgraded their status to that of “resource partner.” In other cases, primes have dropped smaller partners completely.
So what can be done?
First of all, USAID opportunities typically allow for alternatives such as de minimis accounting when an organization does not have a NICRA, but in the case of this GHSC tender, these kinds of alternatives do not appear to be allowable, and it is now unclear if the alternatives that USAID initially outlined in the underlying RFP are applicable anymore. At the very least, that needs to change. We urge USAID to revise or delete this Q&A language, or provide more clarification if their intent was not to cut out smaller partners, local organizations, and best-in-class innovators.
As this is one of the first in a series of GHSC procurements, we further urge USAID to avoid the use of such overly narrow requirements in future GHSC-related opportunities, or in future procurements related to the new Global VAX initiative, which Administrator Power announced yesterday. Instead, the agency should move in the opposite direction by making it easier for innovators, new partners, and local organizations to participate.
We’re standing by.