USAID AWARD COST EFFICIENCY STUDY: RECOMMENDATIONS & TRANSFORMATION PATHWAY

The ultimate objective is to enable USAID to focus on value-for-money and ensure budget appropriations deliver maximum impact with minimum cost to save more lives. This study identifies and quantifies savings that can be realized and redeployed from existing contracts and awards, backed by rigorous analysis. Assessment of cost drivers within existing A&A process from an internal (USAID) and external (partner organization) perspective is a key component of the study. The assessment aims to provide an identified list of actionable changes to assistance and acquisition that will result in reduced costs. What success looks like and entails is also a critical aspect of the study, which involves determining the systemic changes required to install a more efficient process that will ensure a more efficient award management process. Previous updates have focused on drivers of value for money within awards, award-level savings, and preliminary A&A process changes to realize future savings. The study has applied value levers to 50 awards, identified potential future cost avoidance and current award savings, and outlined preliminary hypotheses around areas of cost inefficiency in A&A process and steps USAID can take to address them. The study has also converged five ACES workstreams to inform institutional recommendations on improving value for money. These workstreams include individual award analysis, portfolio-level award analysis, process evaluation, applied value levers to 60 Global Health awards, and mapped current USAID A&A process and policies. The study has diagnosed 8 opportunity areas for improved cost efficiency and identified 8 opportunities to improve cost efficiency. The study highlights the importance of adopting value for money as a core philosophy for USAID. Recent USAID reforms have focused on improving aid effectiveness and results measurement, including tying indicators to funding, creating the Bureau for Policy Planning and Learning, and reforming the procurement system. However, the study emphasizes that USAID will rapidly need to adopt value for money as a core philosophy to achieve greater programmatic impact for money spent within global health. The study also notes that USAID has the potential to drive change within the partner community due to its monopsony status and the volume of money it controls. USAID partners have expressed that streamlined, alternative A&A processes can drive greater value for money. Momentum is building around the need to achieve greater programmatic impact for money spent within global health, and USAID is well-positioned to drive this change. The study concludes that USAID will need to adopt a more rigorous evaluation criteria and leverage new methods of data collection, such as mobile technology, to achieve greater value for money. Donors and organizations are becoming increasingly experienced in articulating expected impact and outcomes of global health projects, and managing to those outcomes/impact. Therefore, USAID will need to rapidly adopt value for money as a core philosophy to achieve greater programmatic impact for money spent within global health.