USAID should let for-profit companies help it build a better world

In 2019, the U.S. Agency for International Development developed the “New Partnerships Initiative” (NPI) to build a “safer, healthier and more prosperous” world for people everywhere. NPI simplifies access to USAID resources and makes it easier for partners to bring forward their ideas and innovation.

In simple terms, NPI helps USAID collaborate with local nonprofits on humanitarian work by identifying new partners and sources of funding, streamlining access to resources, promoting local leadership and providing training.

However, the NPI legislation, as it stands, has its limitations. For-profit entities are excluded from receiving NPI funding, and many of the small business set-asides created by Congress have been co-opted by industry insiders and ex-contractors. Additionally, many of the breakthrough innovations that we need in global development have been spearheaded by for-profit entities, including those located in low- and middle-income countries.

In 2016, Premise had its first opportunity to work with USAID, and it was a proud moment. That year, USAID — through a Grand Challenge grant — asked us to design tasks for our Contributors as a way to identify and destroy mosquito breeding sites. More than 7,000 citizens participated in three cities, showing Colombian authorities through mapping where the most high-impact areas were located.

Since then, our platform has been used by over 20 USAID-funded projects to get data-driven answers to their questions about activity design and evaluation. And with the introduction of Unlock Aid — a coalition of innovative organizations uniting to drive structural change in global development, of which we are a founding member — we continue to work with USAID to push for legislation like the NPI.

New Partnerships Initiative legislation

With the hope of changing the way USAID does business, Senators Tim Kaine and Marco Rubio introduced the New Partners Initiative (NPI) legislation in July 2021. The bill would authorize $250 million over the course of four years to make it easier for new entities to receive foreign aid funds and implement programs.

The NPI legislation would result in several positive changes. Although NPI was founded in 2019, the 2021 legislation codifies significant funding for new and underutilized partners. It also directs USAID to use solicitations that lower barriers to entry. The legislation also directs USAID to simplify reporting and requires USAID to submit an annual report to Congress detailing how it implemented the NPI program.

Unlock Aid and Premise support this legislation with the caveat that it should also allow for-profit entities to be “new partners” — not just nonprofits.

In November, Administrator Samantha Power gave a speech at Georgetown University regarding a new vision for global development that includes for-profit companies:

Inclusive of this country’s diverse talent and dynamic private sector; inclusive of the voices of those whom we are privileged to serve alongside; tackling problems abroad in a way that is responsive to our partners, that will save lives, and that will advance American interests and values.

Disruption in the industry

It is difficult for tech companies to work with USAID because commercial business models do not fit how USAID operates. The biggest hurdle is that USAID frequently does not consider whether its objectives can be achieved with existing commercial products and services. Each project is custom-built for its objective by an implementing partner that is paid for implementing it, not for results. USAID could increase the scale of its impact if it were to rely more on products and services that have a use outside of just the international development space.

There is precedent for this in other parts of the U.S. government. Palantir and SpaceX went to federal court (and won) over being unlawfully excluded from competing in their respective fields in the government sector.

Both companies made the same argument: The government must consider whether commercially available products can meet their needs before building new custom products and programs.

When SpaceX filed its suit back in 2014, NBC News noted, “Musk emphasized that the suit wasn’t asking the federal government to award the launches to SpaceX rather than ULA. ‘We’re just protesting as saying that they should be competed,’ he said.”

Similarly, when Palantir won its lawsuit against the Army, Palantir’s attorney, Hamish Hume, said a judge in the Court of Federal Claims issued an injunction on the procurement, forcing the Army to consider commercial offerings such as the one Palantir would like to offer. The court confirmed the injunction but declined to comment further.

“This is a victory not just for Palantir but for taxpayers and our whole procurement system,” Hume said. He said the decision would have a far-reaching impact that would “make it more appealing for innovators like Palantir to come to Washington and compete for government business.”

Innovators working to advance a free, peaceful and prosperous world are seeking a similar opportunity in the international development space — a shot at leveraging commercial products and services to increase development impact.

Thinking beyond the system

The New Partnerships Initiative can be an innovative avenue for USAID to increase its impact around the world. But the initiative can’t ignore the many opportunities presented by for-profit institutions, not just non-governmental organizations, that are able to bring significant investment to the table. There are far too many innovative solutions that can be scaled for the NPI to keep for-profit companies out of the loop, and we hope that the USAID sees the many possibilities removing this stipulation could allow for.

It rapidly became clear that the only way to change an entire industry, the way SpaceX and Palantir did, is to involve a much more comprehensive range of “stakeholders” in the effort, including governments, NGOs and members of civil society.

If NPI expands to work with tech companies, they can provide USAID with existing tools and solutions. Opening up NPI to for-profit businesses is the first step in doing so.

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