U.S. Agency for International Development (USAID)

The U.S. Agency for International Development (USAID) is the independent agency that leads U.S. international development and humanitarian assistance efforts, partnering with developing countries, civil society organizations, and the private sector to end extreme poverty and promote resilient, democratic societies, and contracting with implementing organizations to deliver aid programs globally.

What is USAID?

USAID manages foreign assistance programs in over 100 countries and has an annual budget of approximately $27 billion in fiscal year 2023, encompassing both development and humanitarian assistance. Unlike domestic federal agencies, USAID operates primarily through implementing partners, contractors, grantees, and cooperative agreement holders, who design and deliver programs in host countries. This makes USAID one of the most contractor-intensive agencies in the federal government.

USAID contracting covers an enormous range of programmatic areas: global health (HIV/AIDS through PEPFAR, malaria, maternal health), democracy and governance, food security and agriculture, economic growth and trade, water and sanitation, education, conflict mitigation, and disaster relief. The implementing partner market includes large development contractors (Chemonics, DAI, Abt Associates, Palladium), specialized technical firms, and local organizations in beneficiary countries.

USAID's acquisition framework follows the FAR but is supplemented by the USAID Acquisition Regulation (AIDAR) and agency policy documents that address the unique features of international development contracting, host country considerations, language requirements, security in fragile states, and local subcontracting requirements. The Acquisition and Assistance Policy Directives (AAPDs) and Contract Information Bulletins (CIBs) update USAID policy on a rolling basis.

Why USAID matters for government contractors

USAID is among the most open federal procurement markets for specialized technical and advisory firms. Total USAID contracting (including grants and cooperative agreements) exceeds $15 billion annually when all assistance instruments are included. New entrants can access the market through subcontracting to large USAID implementers or by competing for smaller, specialized contracts and assistance awards.

Example

An international public health consulting firm wins a USAID PEPFAR contract to support HIV treatment programs in sub-Saharan Africa. The firm deploys public health advisors, data management systems, and community health worker training programs across five countries. Quarterly performance reports demonstrate impact metrics, number of patients on antiretroviral therapy, viral suppression rates, and treatment adherence, that the USAID Contracting Officer Representative uses to assess performance and recommend award fee.

Frequently Asked Questions

What is the difference between a USAID contract and a USAID grant?

USAID contracts are used when USAID has specific requirements and directs how the work will be done. USAID grants and cooperative agreements are used when the implementing organization has greater flexibility to design and direct the program within USAID's strategic framework. Both instruments are common in the USAID implementing partner market.

Do USAID contracts require security clearances?

Most USAID work does not require national security clearances, as most programs operate in non-classified environments. However, some USAID programs in conflict or sensitive political environments may require SECRET clearances for personnel accessing sensitive country plans or classified mission orders. USAID PERSONAL SERVICES CONTRACTORS (PSCs), a unique category of USAID implementers, are subject to special suitability requirements.

What is a USAID PSC (Personal Services Contract)?

USAID uses Personal Services Contracts to hire individuals as employees of the U.S. government under contract, rather than hiring through civil service. PSC holders work under USAID supervision and direction, performing roles equivalent to direct hire employees. PSCs are used for specialized technical expertise not available in the USAID workforce. This is a distinct category from standard service contracts.

How can new contractors enter the USAID market?

New entrants typically enter the USAID market by partnering as a subcontractor to established USAID implementers, responding to USAID's Requests for Information and market research, attending industry days and USAID procurement outreach events, and submitting responses to small, specialized solicitations in their area of technical expertise.