GovDiscovery AI Podcast with Mike Shanley

Episode 40: USAID Market Annual Year End Show

Date: December 17, 2024
Guests:

• Valora Lockmiller, Chief Business Development Officer, Bluemont
• Sabrina Ambergi, VP of Business Development, ACDI/VOCA
• Udinopa Abalu, Director of New Business, International Development Group (IDG)
• Christy Hollywood, COO, Konektid International

Main Theme and Purpose

This annual year-end episode delivers actionable insights into major trends and anticipated shifts in the USAID funding market, especially in the context of the 2024 U.S. presidential election and looming administration transitions. The show unpacks how business development (BD) teams are adapting to policy, funding, and structural changes, explores the real implications of "localization," examines moves toward results-based development, funding scenarios, and the growing roles of MCC, DFC, and other bilateral donors. Leaders from across contracting organizations share their strategies and predictions, providing guidance for established, new, and local USAID partners preparing for 2025.

Key Discussion Points & Insights

1. Operating in a Transition Year: Impacts for Business Development

Speaker: Valora Lockmiller [02:31 – 08:47, highlights through 10:38]

• Election Years as Predictable "Transition Years":
  U.S. executive transitions happen every four years, letting organizations anticipate and plan using candidate histories, campaign releases, and third-party insights.

• Three Buckets of Transition:

  • People – Changes in leadership require time for nominations, confirmations, and onboarding, but experienced appointees (e.g., Marco Rubio, David Beasley) may have shorter learning curves.
  • Funding – Anticipated budget cuts, possibly returning to pre-COVID levels. Preparedness leverages data from the prior Trump administration, emphasizing the need to "do more with less."

    “For funding, the reality is we’re going to need to figure out how to do more with less, how to be a little bit more scrappy and apply some of our own principles of adaptive management.” — Valora Lockmiller [06:38]

  • Themes – Some policies are predictable, like the Mexico City policy under conservatives, while others (countering China, economic growth focus) will persist across administrations despite changes in framing (e.g., "locally led development" vs. "journey to self-reliance").

• Change Management:

  • Need to focus on core mission and impact through policy fluctuations.
  • Key question: “How do we make the case for our impact?” — Valora Lockmiller [08:07]

Notable Quotes:

“Even though it’s a transition year, those core things don’t change. And so as with any transition, it’s helping ourselves to keep focus… and that’s for impact.” — Valora Lockmiller [07:46]

2. How Quickly Will We See Policy and Funding Changes?

Speakers: Mike Shanley & Valora Lockmiller [08:47 – 10:38]

• Speed of Change:

  • Policy shifts (e.g., Mexico City policy) likely on Day 1 via executive orders.
  • Budget/funding changes take months or years; appropriations process and Congressional dynamics play roles.

• Rubio’s Influence:
  Marco Rubio's background signals continuity for initiatives like the New Partnerships Initiative.

3. Localization and Locally Led Development—What’s Shifting?

Speaker: Udinopa Abalu [11:32 – 13:22]

• Key Trends:

  • "Journey to Self-Reliance" (top-down focus) and "localization" (bottom-up) remain persistent themes.
  • Established primes serve as critical intermediaries, using their networks to help USAID and other USG agencies work effectively with local organizations.
  • Emphasis on mutual roles:

    “USAID, go ahead and use us… Let us establish primes, help you save time in building those relationships, being your ears and eyes on the ground...” — Udinopa Abalu [12:43]

• Host’s Note:
  Localization is less about shrinking the partner base, more about growing it and making the process locally led at every phase.

4. Results-Based Development and Cost-Effectiveness

Speaker: Sabrina Ambergi [14:39 – 21:10]

• Evolution in USAID Approach:

  • USAID now requires deeper evidence of impact, including cost-effectiveness, not just activity/output descriptions.
  • New Chief Economist’s office and cost-effectiveness analyses set a new bar for proposals.

• Proposal Implications:

  • Need to answer "Why this approach/geography/population?" with trade-off analysis.
  • Increasing demand for cost per unit of outcome, cost-benefit ratios, and impact measurement in short timeframes.

• AI’s Role:

  • Beyond drafting, AI can enable faster, rigorous analysis and synthesis for business development under tight timelines.

Notable Quotes:

“It’s not just the cheapest is best, but how to get the best impact for the least resources, which might be more expensive than some things but more impactful than others.” — Sabrina Ambergi [17:15]

“…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.” — Sabrina Ambergi [20:35]

5. Funding Scenarios & Congressional Dynamics

Speaker: Christy Hollywood [21:40 – 25:29]

• What We Saw, What Next:

  • Echoes that prior “headline” cuts (30-37%) led to actual ~10% cuts—this time could be different.
  • Senate, USGLC, and broader coalitions play key roles in protecting aid budgets.
  • Expect a rapid push for policy/budget changes in first two years due to unique one-term (non-re-election) presidency.

• Contingency Planning:

  • Possible use of rescission processes and pullbacks on unobligated funds.
  • The industry needs to prepare for potential government shutdown guidance shifting from “stop work” to contract terminations, a significant risk.

6. Advocacy & Communicating Value

Speakers: Valora Lockmiller & Panel [28:28 – 29:23]

• Increased Advocacy Needs:
  • Industry organizations (USGLC, Interaction, SID) will level up advocacy work, focusing messaging on the “why” and national/global impacts of U.S. aid.

7. Economic Growth and Private Sector Engagement

Speaker: Udinopa Abalu [29:26 – 31:34]

• Continued Prioritization:
  Economic growth, private sector engagement, and responsible investment environments will remain top USAID priorities, benefiting contractors like IDG with those focuses.

8. MCC, DFC, and Shifts Toward Bilateral Funding

Speakers: Sabrina Ambergi, Udinopa Abalu, Valora Lockmiller & Christy Hollywood [35:54 – 43:25]

• MCC/DFC Activity:

  • MCC remains important, with new compacts and public procurement opportunities.
  • MCC’s bilateral model, commercial contracting process, and transparency may appeal under a conservative administration averse to multilaterals.
  • USAID may look to MCC’s models for procurement and partner engagement reforms.

• Procurement Reform:

  • Likely increased attention to simplifying regulations, multiphase procurement (concept notes, orals, etc.), lowering entry barriers, and moving funding from multilateral to biddable avenues.

9. The “Biddable” Market and Potential Shifts

Speakers: Panel [43:25 – 47:08]

• Potential Scenarios:

  • Even if total funding drops, reduced multilateral allocations could keep the “biddable” market (direct contracting opportunities) relatively stable for primes and local partners.

• Staffing Constraints:

  • USAID’s relatively insufficient staffing could limit capacity for greater localization and oversight, despite higher ambitions.

10. Euro Donors and Global Ripple Effects

Speakers: Valora Lockmiller & Mike Shanley [47:09 – 48:13]

• US Funding Changes Affect European Donors:
  • Shifts in U.S. aid to Ukraine could trigger resource reallocations among Euro donors, possibly increasing their interest in the USAID market.

Looking Ahead to 2025 – Panel Reflections

Panelists Share Indicators and Priorities to Watch:
[49:10 – 54:05]

• Udinopa Abalu:

  • Continues to watch for “local sustainability plans” and “local engagement” sections in proposals, hoping these become standard evaluation criteria.
  • Shared example: Moldova financial sector project is now 100% locally owned.

• Sabrina Ambergi:

  • “The biggest indicator… will be when the administrator is named and how quickly that they’re named.”
  • Watch for both interim and permanent leadership decisions.

• Valora Lockmiller:

  • Emphasizes the opportunity (not just the challenge) of demonstrating value and impact, regardless of funding cuts.

• Christy Hollywood:

  • Advises organizations to be “scrappy” and ready to pivot.
  • Disaster risk reduction and cost-effectiveness will be in sharp focus, even as “climate change” references may fade.

Final Takeaways and Contact Information

[54:34 – 59:28]

Valora Lockmiller, Bluemont

• “Let’s show 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.”
  • Contact: bluemont.org, LinkedIn

Udinopa Abalu, IDG

• “At the end of the day, we’re all committed to establishing common ground and working together to make the world a better place.”
  • Contact: Company website, LinkedIn

Sabrina Ambergi, ACDI/VOCA

• “We really need to tell that [ROI] story more broadly so people realize the benefits that do come from what is really a very small investment.”
  • Contact: acdivoca.org, LinkedIn

Christy Hollywood, Konektid International

• “Take a look at your own portfolio of work and how you think that might be impacted. … Really, really focusing in on your capture efforts to figure out… cost benefit analysis on your technical approaches before you see the solicitation.”
  • Contact: LinkedIn (ChristyRoach Hollywood), connect@konektid.com

Standout Quotes & Memorable Moments

• Valora Lockmiller:

  “For funding, the reality is we’re going to need to figure out how to do more with less, how to be a little bit more scrappy and apply some of our own principles of adaptive management.” [06:38]

• Sabrina Ambergi:

  “…we really have to be able to clearly demonstrate the impact of our work and prove that impact.” [20:35]

• Udinopa Abalu:

  “USAID, go ahead and use us… Let us establish primes, help you save time in building those relationships…” [12:43]

• Christy Hollywood:

  “There is going to be a big push… to get a lot done really fast because they basically have two years until they could potentially face divided Congress…” [25:29]

• Mike Shanley (Host):

  “Localization is less about shrinking the partner base, more about growing it and making the process locally led at every phase.” [13:22] (paraphrased for clarity)

Timestamps for Key Segments

• Transition year strategies: [02:31–10:38]
• Localization’s future: [10:38–13:22]
• Results-based development & cost-effectiveness: [14:39–21:10]
• Funding and budget dynamics: [21:40–25:29]
• Discussion of advocacy and industry response: [28:28–29:23]
• Private sector engagement: [29:26–31:34]
• MCC/DFC as models and bilateral focus: [35:54–43:25]
• Panel: the “biddable market” scenario: [43:25–47:08]
• Euro donors & ripple effects: [47:09–48:13]
• 2025: What to watch & organizational advice: [49:10–54:05]
• Final "So What” takeaways and contact info: [54:34–59:28]

Summary

As the USAID market stands at another pivotal administration turnover, this episode arms partnering organizations with foresight and practical approaches for scenario planning, business development, and advocacy. Localization, results-based frameworks, cost-effectiveness, and procurement reforms are set to intensify, while coalition advocacy continues to be instrumental in preserving U.S. foreign assistance. Organizations are encouraged to stay adaptable, proactive, and evidence-driven in making their case for continued U.S. leadership on global development.