The Credit Union National Association (Cuna) has criticised the procurement process of the US Agency for International Development (USAID) for favouring large contracting firms.
In March, Cuna, which represents credit unions from across the US, wrote to the Senate Foreign Relations Committee to highlight credit union priorities at USAID.
“Many [not-for-profit organisations], like credit unions, have extensive community rooted networks in countries that are prioritised by USAID,” the letter read. “Such organisations can provide USAID with specialised skills, organised networks and a proven track record to support USAID implementation of US foreign assistance. However, these US private voluntary and not-for-profit organisations tend to be smaller and more specialised; as such, they face procurement obstacles in the effort to partner with USAID.”
Set up in 1970, Woccu grew out of Cuna International and the two apexes continue to work closely together.
Cuna said that large contracting firms continued to “increasingly dominate” USAID awards. “We respectfully ask Congress to ensure that USAID addresses USAID procurement in ways that will ensure a fair access by smaller US private voluntary and not-for-profit organisations and urge you to address this issue to Ambassador Power during her confirmation process,” the letter said.
From 2002 to 2019, USAID increased the proportion of funding awarded to the top 60 US development firms by about 4%, from 79% to 83%. In 2019, USAID awarded US$4.6bn to 363 US firms, US$3.8bn of which went to the top 60 largest firms.
Woccu applies to and tries to access international project development funding from a lot of different sources, such as national governments, the Bill and Melinda Gates Foundation or the World Bank, said corporate communications manager Greg Neumann.
He said Woccu shared Cuna’s concern around USAID’s shift towards larger for profit contractors. “We’ve seen a reduction in funding and a lesser share going towards smaller nonprofit organisations and NGOs like Woccu,” he said.
The Biden administration announced that a key focus for foreign aid will be helping other countries fight the Covid-19 pandemic and strengthen their public health sectors, with plans to provide US $2bn to help medium and low-income countries acquire Covid-19 vaccines.
Woccu says it welcomes the focus on tackling Covid-19 and is not concerned about funding going to the fight against Covid-19 taking dollars away from its projects, adding that such funding could support the work of the organisation.
“We are not concerned about dollars going to the fight against Covid-19 taking dollars away from us. If anything, we think it could help us,” said Mr Neumann. He said Woccu’s projects met a lot of the foreign assistance and USAID priorities highlighted by the Biden administration.
Since 1971, Woccu has implemented over 300 technical assistance programmes in 90 countries, focusing on building financial co-operatives with affordable financial products and services.
USAID has been contacted for a comment.