← GovDiscovery AI Podcast with Mike Shanley
GovDiscovery AI Podcast with Mike Shanley
Ep 40: USAID Market Annual Year End Show
01:00:38
Sabrina Amburgey, Vice President of Business Development at ACDI/VOCA, Udunopa Abalu, Director of New Business at the International Development Group, Velora Loughmiller, Chief Business Development Officer at Blumont, and Christy Hollywood, Chief...
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A
Welcome to the Aid Market Podcast where.
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Foreign aid partners connect to learn about.
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Key funding trends and market insight. The podcast is co hosted by Aid.
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Connect Data, the pipeline and market intel software for USAID Partnering and Connected International, the leading USAID partnering support consulting firm.
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A
Now here's your host, Mike Shanley.
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C
Welcome to the Aid Market Podcast. Very fun show today. It's our year end show. We get to hear from senior business development staff at USAID Partners on what the key trends have been in 2024 as well as what we're looking for in 2025. Today we have on the show Valora Lockmiller, Chief Business Development Officer at Bluemont Sabrina Ambergi, Vice President of Business Development at ACD Ivoca Udinopa Abalu, Director of New Business at the International Development Group IDG and Christy Hollywood, Chief Operating Officer at Connected International. Thank you all for being here. To get started. Just want to make two quick announcements. Connected and Aid Connect will be hosting the Aid Market Conference September 10, 2025 at the National Press Club. That'll be a conference targeted towards business teams. So insight on things like how do tech committees really work, how are business development teams using AI tools? A great chance for the Primes to get deeper insight into business development and for new partners and local partners to connect with with the Primes. So we'll put some information in the chat in the show notes. Also we launched a premium newsletter. We'll also put that link in the show notes and in the chat here if you're interested. With that, let's get right into the conversation. Today we're going to be hearing on how business development teams operate in transition years, localization, locally led development, what that means for established partners in mid sized organizations, updates on results based development and what we might be seeing more of in the coming administration as well as insight from Christy on funding scenarios. So with that, Valora, let's start with you. Could you share a bit of your insight on how business development teams operate in a transition year and what might be different or what might stay the same during these years, these every four to eight year scenarios.
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D
Thanks Mike. First off, let me say thanks for the opportunity to be part of this podcast. I'm excited to be here today and join this panel. So yes, let's talk about election years, transition years. So the the best and worst part about US Executive branch elections is that they are every four years. So the good side of that is that we know when they're coming. We generally have a sense well in advance of who the candidates are and at least a few months about who the eventual winner is. Meaning that we can, there's plenty we can do in advance, especially in a race like this where the two candidates are fairly well known or at least have a history we can reference. So there's campaign information, releases, third party plans or initiatives that we can work on. The tougher challenge is that as you mentioned, it's all about transition. And really that gets put into, I would say, three different buckets. So you have the people transition, the funding transition and the themes. So if we look at that with the people, it's both the process aspect of that, so the nomination, the eventual confirmation, presumably, and then the person getting up to speed. If we look closer to home in some of our area, the Secretary of State nominee has been made. Marco Rubio, interesting point there is, you know, he was part of the Senate Foreign Relations Committee, he was part of the Senate Appropriations Committee. So it's plausible that if confirmed he's someone that it may not take him as long to get up to speed. He's going to be a little bit more familiar with the nuts and bolts of administering. And so compared to some of his counterparts, that could be an advantage that we see in our industry. Now we know that the USAID administrator hasn't been nominated yet. If I were to look in my crystal ball, someone like David Beasley is a probable shortlisted person on the list. Someone who is World Food Program executive Director under Trump, won and continued under Biden generally has bipartisan support. And so whether it's him or someone like him, it's likely, it seems to be someone that would have that type of background that may make for a faster pickup if they are in fact confirmed. And so I think that's one of the bright spots that I see is that we may not necessarily have as much buildup as the nomination and confirmation process goes through. Now if we shift to funding, as we know, foreign assistance falls under the international affairs budget. So that's the, you know, State, usaid, mcc, Peace Corps. We know going into this new administration that there will be cuts. There's been, no one's been shy about that. And more than likely, meaning it's going to go back to pre Covid levels, budget levels. The benefit is that we have an entire four years of a Trump 1 administration to get a sense of what those funding requests were, what the actual funding was, the spending data, it's all there. And when paired with, you know, new initiatives or write ups from either the campaign or third party groups, we really can get a sense to it informs what those likely priorities are going to be. So for example at bluemont one of the things that we've done is even pre election going through all of that data, funding and spending and trends and doing scenario planning. You know it's, it's not necessarily a guarantee but it, it gets us reasonably in that right direction. And for funding the, the, the reality is going to be we're going to need to figure out how to do more with less, how to be a little bit more scrappy and, and apply some of our own principles of adaptive management as we look at some of these different principles, the last around themes. So some of the things are going to be predictable. The classic example is pretty much anytime there's a, an incoming conservative administration, there's a reinstatement of the, the so called Mexico City policy. There are some continuity factors too. Countering China that's currently under the Biden administration, that's expected to continue under a Trump 2 always in all ways countering China. Also things like a focus on economic growth. And some of the changes may be substantive and some may only appear to be substantive. One example being what we currently call locally led development, you know, under Trump, one that was journey to self reliance. But the localization focus stays the same. That remains. Similarly climate change as a term, very likely to go away. But the impacts of climate change, whatever a person you know may, may attribute them to that remains. So soil erosion, food insecurity, malnutrition, water management, the humanitarian needs that come out of that, the destabilization that that can have for governments or civil societies, those realities still remain. And so while there may be a sense of, of of change on some of those factors, the realities of them remain. And so really it comes to us as implementers in this environment, particularly as BD professionals, as we're helping to design and lead how these programs will play out is how do we continue to focus on the core needs around the global community. And you know, if you look at, at Bluemod, at IDG, at ACD, iBoca, at companies across our industry, it's the missions and visions typically come down to wanting to make a difference. And so even though it's a transition year, those core things don't change. And so it's I think as with any transition, it's helping ourselves to keep focus, keep our sights on why we get into this industry in the first place. And that's for impact. And so as those BD professionals it's asking the question, as we would under any administration how do we make the case for our impact? And so I think from that perspective there will be a lot of change. But how do we keep our focus? How do we keep our focus on impact valor?
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C
Actually a quick follow up on that. In terms of potential changes, what you've seen in past transitions, how quickly do you anticipate seeing any changes, whether it is on the policy side? And one thing to note too as well with Marco Rubio is he was also a supporter of the New Partnerships initiative, which was a Trump one initiative continued under Biden Samantha Power. So we'd anticipate with him as Secretary of State, likely continued focus on that. But yeah, is, you know, day one, you mentioned things like the Mexico City policy, Day one, within the first couple days, likely those would get affected. But then budgets talking months, couple years potentially and then, you know, once we get up to two years, we're running into the midterms. Yeah. How, how do you think about, you know, the timeline for when some of those changes might come into place?
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D
Well, it's fair question and I think one of the things we've seen with, with the last three, maybe even four presidents is an increase of use of executive orders. And so I think that's very likely to occur. While those, those can pack a punch, not all of them make it to the finish line just by nature of what executive orders are, especially if there's funding attached to it, to your point. So, but I think what that will enable us is to get a clear sense and vision of what those, what the intent is, even if the executive orders can't go the full distance of the intended motive. As you noted too, with funding, given that we will also have a Republican Congress and a lot of pressure being put on them to help with the government efficiency, I think there's going to be a lot of pressure on them to move things quickly. Um, and so within reason it's something that maybe could move faster than it has in previous scenarios. So that, that will certainly be something to watch.
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C
Yeah, and it'll be interesting too to watch. It's the first time since the 19th century that we've had a non consecutive presidential term come in and obviously we didn't have USAID under Cleveland. Udonopa to you, could you share a bit about your insight on localization locally led development? Of course, this has been as part of various iterations for decades really at usaid there was a focus under Trump one, a continuation, a key piece of administrator Powers team's work and continues to be a core piece of their work. But you know what's interesting to me is too is just is that localization and locally led development. Every time I hear USA talk about it, they talk about there's a role, there's a need for the established partners to be part of that and how they can drive locally led development. So love to hear your thoughts on what you've seen in the the 2024 trend in terms of localization.
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A
Sure.
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B
And thank you again Mike for having me here. I'm glad to be with you all. So we've seen the terms journey to self reliance and localization used as retain Tripoli, both are still going to be required. When you look at the journey to self reliance is focused more on domestic resource mobilization and fiscal management. It's more of a top up approach. Right. And then with localization it's more focused on doing sustainable development through local partners and it focuses more on a bottom up approach. And so those two themes are not going to go away anytime soon. So as far as the role of established primes in supporting locally led development, I believe that contractors such as idg, acdi, voca, Blumas, others, they can serve as intermediaries with USAID when it comes to working directly with local partners. And USAID already has a competitive advantage of having hundreds of mission offices across the world and they can go out and engage with key decision makers and develop those relationships, manage expectations and implementing projects and managing US Government funding. So for usaid and I know we have some USAID colleagues joining here, usaid, go ahead and use us. Let us help you. Let us establish prize, help you save time in building those relationships, being your ears and eyes on the ground not only for USAID but for the entire US Government.
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C
Great. Thank you to I think we'll get back to a little bit more on on that later in the show. One thing just to note, we did several events with USAID in October and every time I hear them speak about it, going back to when I heard Mark Green speak about it when he was the administrator under Trump 1 Samantha Power, it's never about shrinking the partnering base. It's about growing the partnering base. It's about making the tent bigger. It's about bringing more organizations in. And it's not really even a fixation on let's get more checks to local partners. It's let's make sure the whole process is locally led from the design of the procurements through the implementation through the mouse, the monitoring, evaluation and learning side of it. So Sabrina, on that note, love to shift to you on the next topic, what we'd anticipate, and this is Bill Steiger was on the podcast recently. He was the Chief of staff under Trump 1@ USAID and talked a lot about results based development. He even brought up the Millennium Challenge Corporation, the DFC as models. What have you seen in terms of results based development in the USAID market as well as what a greater use of that might mean for business development teams?
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A
Yeah. Thank you, Mike. Great to be here and participate in the discussion. I think this is a trend that I feel has definitely been taking on more defined shape over the last year or two. We have the new Chief Economist office led by Dean Carlin. They recently released the cost effectiveness position paper. I felt like that was really an important piece that came out and showed a lot of intention on where things are going. I'm also seeing some USAID bureaus investing in greater analysis of their track records and the projects that they've supported in an effort to better understand and fund what the evidence is actually saying really works. In fact, just this morning I was reading a news item that USAID has engaged the center for Effective Global Action at University of California, Berkeley for an initiative called Promoting Impacted Learning with Cost Effectiveness and Evidence, or Cost Effective evidence. Sorry, but the goal of that project is to help USAID inform its activities and programs with evidence about what works to alleviate poverty. So USAID itself is really investing in this idea of cost effectiveness and the end impact. So in terms of what that means for business development, we are increasingly needing to not only describe the activities and the outputs that we're proposing, but also be able to articulate tangible, measurable outcomes and impacts and more specifically the cost effectiveness and the expected return on investment for usaid. Traditionally, I think in developing proposals we tended to focus most on the who, what, when, where and how. That's what you have to cover in your proposal. But I think increasingly we are also going to need to demonstrate and articulate the why. So why this activity and not that one? Why this geography and not that one? Why this target population and not that one? The CEO office is talking a lot about trade offs and they want to see that trade off analysis in the, in the proposals. So to be successful under those demands, we have to be able to show how our proposal delivers the best trade off between maximum impact with the least amount of resources. Now that doesn't mean that the cheapest is best, but again, it's that trade off how to get the best impact for the least resources, which might be more expensive than some things but more impactful than others. And this has a lot of implications. It has implications for how we do targeting. It has a lot of implications for our budgeting and financial analysis. I think USAID is going to be looking for things like cost per unit of outcome, cost benefit analysis, cost effectiveness ratios. Those are not things we typically are presenting as part of a proposal. At least, you know, we haven't been doing that traditionally very often anyway. It's also going to put a lot of demands on our M and E. Everything from being, you know, the continued more emphasis on outcome and impact indicators to the fact that at least the Chief Economist Office really seems to be doubling down on randomized control trials as kind of the gold standard. But RCTs are typically pretty expensive and challenging to carry out well in a development or even more humanitarian context. And then of course the cherry on top of that is that more often than not we have to be able to do all of this within about 30 days of seeing an actual solicitation. So that also has really big implications for how we do our capture and what we're doing in our capture phases. With the emphasis on localization and locally led development that we've just been discussing, which I fully expect will continue, it's going to still be really critical to get the on the ground direction and context. And I think correctly identifying and understanding the root causes becomes even more important, important in terms of achieving the desired impact. If we haven't identified the right root causes, then we're not going to have the desired impact. But also these kinds of cost benefit and cost effective analyses that I mentioned, again that's not necessarily common in today's practice, particularly not at like a capture stage. So we need to learn how to do them. And in particular we need to learn how to do that kind of an analysis when we don't have very many details necessarily about the potential project. There may or may not be an RFI or a draft SOW scope of work. And even if there is, often the point of those are to get information from potential implementers. And so there's changes in some of the key factors by the time the actual solicitation is released or the conditions on the ground might have changed. So that leaves us with the need to do even more rigorous analyses in a really short period of time. For me, that then leads me to the question of AI. And I think a lot of attention over the last year has been on what's the potential role of AI in drafting proposal narratives. And I've seen a lot of companies coming out with those services. But I think there's also potentially a bigger and maybe more important role for AI in supporting this kind of rapid but rigorous effective analysis and streamlining the capture process and getting the right information and capture. And so I think that's a really interesting area that's been developing and that I'm looking forward to seeing how that progresses in 2025. So overall I think this is a really big challenge, but I think that's one that we have to rise to. I think as Valora alluded to earlier with the new administration, but frankly worldwide shifting perspectives on the value of development and humanitarian assistance, I think now more than ever we really have to be able to clearly demonstrate the impact of our work and prove that impact. And I think it's really becoming an existential issue for us as a development and humanitarian community. So that's something that I think has.
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C
Been thank you very much, Sabrina. Yeah, thank you very much. One thing to add too on AI is Jamie Rogers a chief acquisition officer. And then Bill Steiger, the former chief of staff have said in the show too, is also USA looking at AI to maximize their internal or improve their internal efficiencies as well. Great, thank you. Christy, could you talk a little bit about what we're seeing on the funding scenario side, maybe building off a bit of what what Valora kind of set up and shared?
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A
Sure.
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E
The funding question comes up every time I've talked to anyone since the election because everybody remembers when during the first Trump administration they tried for 30% or actually one year, 37% cuts to foreign assistance, not just USAID but broadly foreign assistance. What we actually saw was a 10% cut at USAID and that include well and military. So foreign assistance writ large. We saw about 10% I think across the board at USAID and half of that was Iraq funding because that was drying down. So it wasn't that significant. I think this time might be a little different. So for scenario planning, I think people have brought up some really good points. The continuation of the Pacific strategy, encountering China more broadly, local led cost efficiency and how those intertwine. So as you're planning, not just for top line budget numbers and how the priorities of the administration for economic return as well as national security returns on their foreign assistance investments affect the type of work that's going out and where the funding goes. Thinking through, probably looking for cost effectiveness, not the standard value for money calculation that FCDO and DFID before that used, but really thinking through and it'll be interesting to see where in four years we end up on standard rates of calculation because as Sabrina was saying, there's a lot of different ways you can measure the cost effectiveness of your programming writ large or a very specific program. So I think those are going to be some interesting challenges to look at in terms of protecting the funding or making sure USAID remains fairly whole so that people can continue to do the great work that everyone's doing. As Valora mentioned, Rubio at State is a very comforting choice for a lot of us. He was, he has made statements about cost effectiveness being really important. So holding that in mind. But there was also the big push during the Trump administration that the Senate basically protected foreign affairs funding with some support from House members and the US Global Leadership Coalition. USGLC really worked very effectively to make sure people realized on the Hill and more broadly across the country what foreign aid does for the United States as well as for the folks we're working with all around the world.
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C
Yeah. And we'll actually have Liz Schreyer, the head of US GLC will be on the next episode that yeah. Of the Market podcast. Christy, do you have any thoughts on, again, the uniqueness of a 1:1 term presidency? There won't be a reelection in terms of when some of these changes might come through. Also, as I understand, the midterms so in two years do favor the Democrats in terms of the Senate mapping doesn't mean they're going to win, but it does mean the Republicans would have more seats to defend. And then shortly after that, I imagine the 2028 presidential campaign will be in full swing. Yeah. Any thoughts on how that might affect it, given that the incoming President Trump won't be up for reelection.
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E
So you're going to see a big push, as several folks have noted, to get a lot done really fast because they basically have two years until they could potentially face divided Congress, which would be harder to get things through. So there is going to be a big push. There have traditionally been limitations on how much an administration will change the budgets already in place or already going through the process. Some of the comments from the Office of Management and Budget nominee Russell Vogt lead me to think there may be attempts to shift that. I don't think USAID is going to be a primary focus for those efforts, but it is one of the scenarios, kind of a worst case scenario planning piece that I've got on my little checklist. But basically they're going to try to get as much done as fast as possible. I think this first year we'll see some changes. Next year will probably be a little bit more budget shifting. But again, from 2016 to 2019, there was a slight decline in USAID funding. 2020, it went back up. So I'm not that concerned. The bigger worry on the budget side is there's likely going to be another continuing resolution this month rather than full appropriations, which is disappointing but not fully unexpected. And then next year when the new Congress is in, they're going to try to get a full budget done while pushing through all of the other initiatives the administration's trying to do and then having to deal with the debt ceiling coming up, I believe in March. That's a lot. If there starts to be infighting, if there starts to be all those sorts of things and we have a government shutdown. I had heard recently that the last Trump administration, their guidance to agencies on shutdowns was not to do stop works, but to do termination for convenience on contracts. That is a very big difference. And I think that's something that the industry needs to be aware of. I know some folks in the industry are already starting to talk to people about why that's not a great idea.
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C
One thing noted as well, too, and the Senate side, at least in terms of the leadership in the Senate and the Foreign Relations Committee, does seem to be, it's a bit more the traditional moderate Republicans that will be an influence again within Congress. Half of it just the US Senate, but it'll be interesting to see how that plays out. But Laura, could you like to share some additional thoughts on this conversation?
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A
Yeah.
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D
Just building off of Christie's comment. You know, she mentioned the UG US glc. And I think one of the things that we see in any administration, but particularly that we saw under Trump, one is, is a leveling up for organizations like USGLC or Interaction or SID or a number of the others are out there of really becoming advocates as they've always been. But again, a leveling up of what those responsibilities and opportunities are, both of those organizations and we as an industry, as members of those organizations to advocate for the Sabrina was talking about the why, the why of the work that we do, the impact that it has. And so I know those are already underway, but I can only anticipate that those will increase both in number and in need as we move forward.
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C
Great. Udinopa, additional thoughts?
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B
Yes, thank you. I also appreciate what's been said about cost efficiency. And Valora, you had alluded at the beginning that we know that funding cuts are going to be inevitable. There are Also other areas that will be prioritized under this new administration apart from increasing enabling environments for responsible investments, PEPFAR funding, health that's going to be prioritized, humanitarian response, localization. I want to place a special emphasis on economic growth and private sector engagement for idg. We are a growing firm. We've been on a journey of being a small business going into a medium sized firm and we primarily implement economic growth and private sector focused projects and we're glad to see that this will remain a priority in 2025. And I think USAID has done a really good job of promoting economic growth and private sector engagement this past year. So economic led growth is increasingly important and working with the private sector with economic growth this leads to more jobs being created, higher incomes, more middle class. It also leads to sustainable livelihoods, increased tax revenue for governments to finance their own development needs in developing countries. So it's a no brainer that broad based economic growth is important for improving lives and it's a win win for us and for developing countries and with private sector engagement. We talked about focusing on China a little bit. It's important to develop private sector domestically and increase the enabling environment for responsible investments because it gives you more control and oversight of financial assets to make sure there's cost efficiency there and that those are managed responsibly.
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C
Great, thank you. Sabrina Christie, any other thoughts to share on any of that?
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A
Not so much a thought but maybe another question to anyone. But kind of following what Christy said, my recollection is that in the first Trump administration they used the or they or at least attempted to use the rescission process quite frequently as a way to expedite budget reductions. And I'm curious if we think we'll see because I tend to agree with what you said. I've heard a lot of people kind of trying to calm people by saying no, no we're not going to see big changes to the funding and for at least two years. And I tend to agree with you. I think they are positioned now and incentivized now to make changes as quickly as they can. And I'm wondering if you think that we're going to see a lot of the rescissions kind of mechanism at work again.
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E
So what I have heard buzz about is more looking at the Doags. So so if money is not actually obligated to a specific project, they have it sitting in the account waiting to be spent for year two. That money is at risk. And I think that that's probably the biggest kind of inside Baseball keys there, there is a chance they'll be doing pullbacks. I don't know if they're going to rescission can get at the doags the bigger one and I'm forgetting the name of the policy now policy that Congress outlawed after Nixon where basically the President can decide not to spend money that's been appropriated by Congress that will be going to the Supreme Court. They're going to try it that the Trump administration will undoubtedly try it not necessarily for USAID but somewhere in the government. So I don't think they would be able to implement that broadly initially. But yeah, Sabrina, I think you're right. Rescissions of money that hasn't been fully obligated is going to be a concern. Yeah, I'll leave that one there.
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C
Yeah Valora.
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D
Yeah, I think just kind of building off of that we'll have the, the funding realities but also where and how they play out. If we look at for example the CDCs there are probably 25 plus that are going to be expiring by the end of 2025. So these are 2019 to 2025. So they were initiated under Trump 1, they will be revisited, rewritten, redesigned under a Trump 2 administration. And so that has as much as the funding that has the potential to impact where and how and how much of the funding and on what that we'll see. And so I think it's the pairing of those two things in particular that we'll see those impacts and intent for the coming future.
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C
And I think I want to just throw a note in there for the non established partners, the new partners, the local partners as we talk about cuts even if we're talking a 30% cut or so or going back to pre Covid levels, we're still talking about maybe around the 20 ish billion dollar a year range, maybe 15 to 25 billion very broadly in terms of some of the largest cuts in there. So that deal still even in those scenarios keeps USA does one of if not the largest bilateral donor. One thing that's come up a lot is also MCC and DFC and the role of, of those agencies. Does anyone want to share some thoughts on what they've seen of the MCC model or if any of your organizations have worked with them and, and, and, or dfc I think DFC something that I know we're all still you know learning how to, how they're operating and how to best engage and support their work. But yeah I would love to hear any thoughts on that model. And as Bill Steiger said, even thinking about how USAID could incorporate some aspects of that into their procurement and implementation process. Yes, Sabrina?
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A
Yeah, I mean I think in the past we used to, ACDI Booker used to work with MCC quite a bit and then for a while, excuse me, they moved kind of away from ag and economic growth more into the infrastructure space. So we kind of, our work started tapered off, but I've seen that coming back now. So we actually have, interestingly we have a coastal livelihoods project, so very much climate change, but also livelihoods and economic growth project that we recently started in Mozambique. And we've got on our radar a number of compacts that we expect to, to generate projects and activities in the what we watch, mostly the economic growth and ag space. So I do see so far at least MCC seems to be still coming in strongly. I think I've heard a lot of speculation that the idea of using some of the, the ways that MCC identifies countries to prioritize being applied by possibly by USAID or by other actors. And I think there's, you know, something to be said for that. I think it perhaps works better for things like economic growth programming than say humanitarian assistance type programming. So I don't think you can say across the board it would be used this way or that. We've certainly seen a lot of growth and impact investing and investment funds. We've had some interesting sort of hybrid type models that are combining USAID projects with impact investment funds that have been, I think delivering some really interesting impact. So I hope that that is something that there is room to continue because I think that's, it's mobilizing a lot of the domestic resources, it's mobilizing government, but it's also, and it's generating like self sustaining funds that can continue. So it's, I think that's really interesting stuff that I hope will continue. Yeah.
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C
Thank you Udinopa.
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B
So International Development Group, apart from usaid, MCC is our secondary client and we've done a lot of work with them including political economy analyses, evaluations on economic analyses and needless to say, perhaps, but MCC did start with Republican support and I think that they'll be very active under this new administration as well. I was also pleased to see that MCC published their fiscal year 2025 business forecast on SAM.gov and so we can already see that ramping with activity there.
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A
Great.
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C
Christy, do you have some other. Oh, Valora, please.
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D
Sure. So I, you know, it's interesting the, the idea specifically around MCC as Udinopa mentioned, you know, it was started under, under Bush, so under a conservative administration. And I could see one of the attractive things since it works more on bilateral agreements. I think we can be fairly confident that an incoming Trump 2 administration is fairly averse to multilaterals. And there's been a lot of funding, as we know, that has been directed there to PIOs, et cetera, over the last years, through the COVID years. And so I could imagine a shift where it, the bilateral approach is going to be much more attractive for that reason, both to be able to better hold close, hold accountable the funding that's spent in each of those different places where there are the compacts and also just the ability to better target where some of that funding will be in the countering China perspective, in the economic growth perspective. And so I think that's something that has a lot of potential as we look forward to how some of that funding may be redistributed across PIOs to bilateral agreements.
- [40:13]
E
Yeah, I would concur with everything said. One of the things that I've been thinking about after hearing comments from several past guests was MCC is a preferred model. It's a lot easier to engage with mcc. They're pretty transparent about the compact process, the negotiations, the goals for each compact. It's a commercial contracting process. It's not subject to the federal acquisition regulations. It's a lot easier. There are lower barriers to entry. USAID has, can't fully implement that unless there's a congressional act to move things to MCC or I know there have been efforts in this administration and undoubtedly in the next administration to try to simplify the ways that organizations can interact with and receive funding from usaid. It's going to be interesting to see and I think the choice of administrator is going to be a big clue when we find out who that'll be, how fast and how aggressive USAID might try to tackle some of those regulations that especially if they're, they're just in the USAID and state regulations and not all of far. But I know a secondary effort that the Department of Government Efficiency doge. Yes, Dooch. I'm bringing it up. They're looking at simplifying regulations, mostly regulations that apply to U.S. domestic organizations in terms of environmental rules, that sort of thing. But I think they're also probably going to be looking at the Federal acquisition regulations over time, if they continue for the full four year period to try to figure out ways to simplify them. Because as we all know, FAR has grown immensely over the years with a new rule every time Something goes wrong. So that's good and bad. I think one of the scenarios that we all need to consider too are shifts in the way that USAID is procuring or awarding funding, whether that's being more aggressive about the multiphase approach. So that it may be a concept. Note that orals and proposal from the asa, the apparently successful applicant or offeror. It may be more limited to new partners or small business or elsewhere or local. The last Trump administration had started the new partnership initiative as a reaction to the concentration of USAID contract funding going to a very small pool of implementing partners. That is likely going to be another focus this time and how they address that from the procurement standpoint I think is one of the big questions in my mind that I'm watching carefully.
- [43:25]
C
Can I ask a question to the panelists? So is there a potential scenario where there's maybe an overall reduction in the total funding, but also a pullback from the amount of fundamentals USAID funding that goes to the multilaterals that could potentially increase or maybe keep the biddable market more stable? What are your thoughts on of USAID's funding percentage that maybe a higher percentage of it, even if the total number goes down, would become biddable be part of the biddable market? Laura?
- [43:59]
D
Yeah, just a brief thought on that is as you know we go through scenario planning. That was one of the scenarios is that, you know, there's been some negative publicity for the PIOs for the multilaterals and how the accountability of how the funding is. And so I would venture guess that even if there hadn't been a shift to a Trump to administration, that we would likely see changes there certainly with Trump to administration. And so then it comes to down to where is that more likely to be invested. And there's a strong case for it to be in the more locally led focus. And you know, as Udinoka was talking about earlier, the because there's been such a focus on economic growth with locally led development. And so you get, you know, a double decker of what some of the intent is of the administration. So from my perspective, I see that as one of the plausible scenarios that we could see.
- [45:03]
C
Great. Well, let's start looking forward to 2025. Sabrina, do you have some other thoughts to share?
- [45:12]
A
Well, just I think that it's a plausible scenario. But at the same time, if we look back, PAYO spending actually went up under the first Trump administration, despite what was being said and the critiques that were happening at the time, PIO spending went up and that was in part because of the situation that was happening at the time. We had Covid, which needed to have money moved quickly. We had Ukraine, which needed large sums of money to move quickly. There are reasons why the money goes through the PIOs, because it is much, much faster way to get money to certain issues. So depending on what happens over the next few years, we may have to do that again, in which case, sorry, excuse me, I'm getting over a cold. This cough is just persisting that, you know, there's this question of where, where are the incentives and what's the most sort of immediate demand that could, I think, while the intention might be to do exactly what Valora said, as our actual reality is shifting so quickly and things are popping up that the convenience of being able to move that quickly is totally important. And then something we haven't talked about yet is the patterns around USAID staffing. They've staffed up and they're at a much higher level and they've been out, I think, since 2017, but they're still far, far away from where they want to be, even to do what they've been doing. As you look at localization, that demands much more investment of time from USAID staff. Some of these other things we've been talking about requires a lot more time from USAID staff. If they're struggling with cuts to operational line items, you know, how is that actually going to play out? Is it going to be possible?
- [47:09]
E
Yeah.
- [47:10]
D
And agree with Sabrina, like, well, the intent is there. We, we may see how it actually plays out. One of, I mean, we've, we've focused understandably, a good deal on USG funding. But I think another potential impact is, for example, Euro donors. For those of us who work with, you know, for Blumon, about, you know, 30, 35% of our work is with Euro donors or essentially non USG. And if some of the intents of the Trump 2 administration, you know, whether it's, you know, Nadine funding contributions, whether it's tariffs, whatever that might be, is that we would also want to prepare for some retaliatory impacts from that or also just a overall reduction of just other bilateral donors and the funding that they may have available in some of those power plays or political shifts that we might see as well. So it's, you know, obviously a USG focus, but the, the ripple effect will fill across all of those different organizations that we all work with.
- [48:13]
C
And another just scenario that came up from a recent events we did in the UK with UK partners interested in a USAID There's a scenario in which there could be reduction in Ukraine funding on the US side which could lead to an increase of that on the European side, which might take funding away from non Ukraine activities for the European donors which could then create even more interest of the European partners, the Swiss partners, the UK partners of coming into the USAID market under the new partnerships initiative. Great. Let's start looking forward to 2025 as we get towards the end here. Udonopa, maybe we'll start with you. Could you share what's one indicator, what's one activity? A confirmation whatever it is something that you're going to be looking for as we threw out a bunch of different scenarios here to maybe give yourself and your teams a bit of clarity of which of these scenarios is most likely which direction USA might go these next four years.
- [49:10]
A
Sure.
- [49:10]
B
Thanks Mike. I going to stick with the theme of localization here. What I've been seeing in 2024 and what I believe we'll continue seeing in 2025 is the increasing importance of local sustainability plans as well as local engagement plans. I've worked on at least two proposals so far where there's an entire proposal section on local engagement plans and it is scored in the evaluation criteria. I would hope that USAID would consider adding that as a proposal evaluation criteria similar to how we have US small business subcontracting plans and goals. Why not have local engagement plan goals as well as 100% ownership to local partners? I'll give you a really quick story if I have time Mike. So for IDG, one example of ensuring 100% local ownership. We just finished implementing a Moldova financial sector transparency activity and one key result was we developed, marketed and launched a digital platform for retail investors to purchase government securities. So we had to plan for setbacks and unexpected things happened during COVID 19 for example. And even though we couldn't plan for every possible case scenario, we did develop an IT plan to keep the securities platform running. And at the end of the day the platform is now 100% owned by the Ministry of Finance in Moldova, benefiting all of Moldova citizens. So it's examples like that that ensure 100% ownership long after the project ends.
- [51:03]
C
Thanks for sharing that Sabrina. Same question to you. What are you looking for in 2025?
- [51:10]
A
I mean, I think for me the biggest indicator of what we might expect and which way things are going to go is will be when the administrator is named and how quickly that they're named. You know, will we have an interim and then a final or will we just go to the final. So that's probably the biggest thing that I'm holding my breath for. But there's so much to watch. I felt like I was like watching the gymnastics at the Olympics. Like there's like 20 things going on all at the same time. I do keep your eye on everything.
- [51:41]
C
It will be interesting if we see a maybe that was the top priority nominees and there's a slowdown after this or it continues. Yes, great point. Valora. What are you looking for going into the next year?
- [51:54]
D
Well, I think also the nomination of the administrator will be pretty telling but we've talked a lot about cost effectiveness and really how we demonstrate those results. And in a shrinking budget, whether it's 1%, 10%, whatever percent that it we can anticipate it being is there's never a bad time to be able to demonstrate the value that we bring. And so taking that rather rather than a challenge but the opportunity that it is to really advocate for the work that we do and the impact that we have and to really amidst all of the many changes that are possible is keeping that focus on that ultimate goal of making an impact across the transition year and years.
- [52:44]
C
Thank you. Christy, your thoughts on what you're looking for.
- [52:48]
E
I liked the word scrappy, somebody that Laura could use and being ready to pivot. I think we all need to do that. One of the things that I'm looking for on the humanitarian side, we had been talking the last administration about the interplay between humanitarian and development and that gap between I think the focus of prior conservative administrations on trying to work ourselves out of a job trying to reduce the need for as much humanitarian aid and as much development aid over time. I think that that's going to be a story we want to try to tell and I think some disaster preparedness, disaster risk reduction, while we might not be talking about climate change, I think those terms are going to come back into play a lot. And thinking through how our organizations can all try to help address that middle piece in addition to the cost effectiveness of which localization is one way that programs can be delivered more cost effectively. And I think that's going to be a big focus too.
- [54:05]
C
Great. Let's go to each guest for a one minute wrap up. We like to ask so what given all this, everyone's going to finish listening to this show and go back to their job of either way winning or managing USAID or other aid funded projects. What's, what's the so what to take away from them and then please add in what's the best way to contact your organization? Velour. Maybe we'll start with you on this one. Your so what takeaway from this and how to get in touch with bluemont's team.
- [54:35]
D
Sure. Thanks so much. Yeah, essentially, so what? Let's show them. Let's show our organization, let's show our, or excuse me, our industry. Let's show them what the value is that we bring not just to USG, but to national policies, to foreign policies, of the impact that we can have. And I'd invite everyone to go to bluemont.org where we have information about the different projects, about some of the great work that we're doing specifically on localization and sustainability there. And I would welcome any contacts through LinkedIn and look forward to meeting more folks across our industry.
- [55:13]
C
Great, thank you. Udinopa, what's your so what? And how to get in touch with IDG's team?
- [55:18]
B
Yes, so my so what is at the end of the day we're all committed to establishing common ground and working together to make the world a better place. And international development partners, we really have no bounds. You know, whether you're a highly capable South African owned firm that operates in South Africa, East Africa, South Asia, in my view you're still an international partner. Whether you're a US based partner that does development work or does domestic work, we're all partners in this. For idg. We remain committed to increasing sustainable economic growth and reducing poverty worldwide. Best way to contact us, you can visit our website or connect with me through LinkedIn. Thank you.
- [56:10]
C
Great, thank you Sabrina. So what and how to get in touch with ACD IVOCA's team?
- [56:18]
A
Yeah, I think I'll kind of echo again the importance of being able to demonstrate our impact and particularly the return on investment. And that's, you know, I was talking about it sort of at the project level but the return on investment for development and foreign assistance. There used to be the big campaign around every dollar of taxpayers money, it's less than $0.01 that's going to make the impact that we are all working towards. So I think we really need to tell that story more broadly so that people realize the benefits that do come from what is really a very small investment and open people's eyes that making cuts here does not have the huge savings that so many people sort of might think that it does. So I think telling that story has always been critical, but more ever more so now. And yeah, same as the others. You can find out more about ACD Avoca and contact us through our website at acdivoca. Org and by all means reach out to me individually through LinkedIn.
- [57:29]
C
Great. Thanks, Sabrina. And that's something we've actually heard through on several past guests on the podcast, Mark Green, David Beasley talking about the importance of it. General George Casey, the former chief of staff of the US army, was on here talking about the importance of aid. And of course there's the famous quote I'm paraphrasing but from Trump's one's Secretary of Defense, General Mattis, if you cut the aid and State Department budget, you're going to need to buy more ammunition. A very blunt way to put it. But yeah, we'll keep, you know, hosting and sharing that message, the importance of aid and definitely going to get into that with USGLC and Liz Schreyer on on on the next show. Christy, what's the so what? And the best way to get in touch with our team at Connected?
- [58:12]
E
Sure. My big so what, in addition to what's been stated, is taking a look at your own portfolio of work and how you think that might be impacted by changing priorities of the incoming administration, thinking through the big wave of country development coordination strategies that's about to be redressed and figuring out what that might look like for you based on your geographic footprint and how you could adjust as needed or try to inform some of those program development opportunities as they're forming those strategies. And then at a more granular level, really, really focusing in on your capture efforts to figure out you're going to need to do that cost benefit analysis on your technical approaches before you see the solicitation. And there's a lot of really good ways to do that. I know will be launching something to help with that as well. And Mike can talk about that later. But if you do want to get in touch with us, I'm on LinkedIn at ChristyRoach Hollywood. Or you can reach us@connectonnected.com to learn more or get more information about the services we provide.
- [59:28]
C
Great. Thank you, Christy. Yes, if you're interested more in those capture research product we're developing, feel free to message us or I'm mike@connected k o n e k t I d.com or message me on LinkedIn. A special thank you to Valor and the team at bluemont Udinopa, the team at International Development Group, Sabrina, you and your colleagues at ACI Voca and of course Connected. Thank you for taking some time out of your day to share your expertise and insight on the Aid Market podcast. I really enjoyed our conversation. Very much appreciate the time, keep up the very important work that you all are doing, and of course, remember to subscribe to the Aid Market Podcast wherever you get your podcasts. Thank you to everyone for joining today and especially to all our guests. And yeah, thank you very much. Have a great day.
- [60:17]
B
Thank you for tuning in to the Aid Market Podcast. If you enjoyed today's show, be sure to subscribe wherever you get your podcasts.
- [60:25]
A
And connect with Mike Shanley on LinkedIn. Just stay updated on the latest USAID funding trends.