It remains to be seen whether lobbyists will win the battle to make USAID needlessly spend money on American contractors.

The words “foreign aid” conjure up images of American tax dollars being sent overseas to populations far away from our shores. Critics of foreign aid see this as a transfer of taxpayer money to non-Americans. Supporters see it as a way for America to support struggling people in developing nations, promote our values, and protect U.S. interests.

But often, foreign aid is neither of these things. For years, big American corporations have won control of foreign aid contracts so that they handle the delivery and implementation of development programs. This way, they take in hundreds of millions of dollars, sometimes becoming a burdensome and expensive middle man between the U.S. government and the foreign populations that overseas aid is supposed to comfort.

Earlier this year, the U.S. Agency for International Development (USAID) had a procurement policy change. The agency  established new rules that “will allow [it] to purchase most goods and services from developing countries, with notable exceptions including US-funded food aid, motor vehicles and US-patented pharmaceuticals.” It plans to spends up to 30 percent of its funds through local firms rather than U.S.-based corporations, which would both save American taxpayers money and boost the foreign local economies that USAID is designed to improve.

New York University’s Development Research Institute (DRI) blog notes that American contractors are not taking this news well. The Professional Services Council and the Coalition of International Development Companies, both representing contractors, have hired the powerful Podesta Group to represent them in Washington to fight USAID’s reforms.

The DRI bloggers note that House Oversight and Government Reform Committee Chairman Darrell Issa (R-CA) has already told USAID he will seek to block their new procurement rules.

“This agency is no longer satisfied with writing big checks to big contractors and calling it development,” said USAID head Raj Shah last year. But if the contractors and their lobbyists have their way, Americans may continue to pay inflated price tags for sometimes subpar development work.

 

Filed under: Lobbying

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  • http://www.facebook.com/people/Leslie-Moore/1687191196 Leslie Moore

    This would be a good issue to bring up as a question in the presidential debates. Does Mitt Romney have a problem with this?

  • CatKinNY

    Well, this would have been a baby step in the right direction, but the all powerful, and all vindictive asshole, Daryl Issa has decided he’ll strangle it in it’s cradle. The fact that this reform would have omitted the purchase of local food rendered it largely useless anyway. As a subsidy to US farmers, we purchase and ship food all over the third world where, guess what?, a whole lot more people are engaged in farming than they are in the production of other goods. Given the fact that low information voters virtually unanimously think that we spend several thousand times a year what we do on foriegn aid, and cite it as a major complaint against the federal government, why don’t we just cancel the whole boondoggle and make it absolutely clear why this program is just as much welfare for big business as it is for starving foriegners, and let the Rethuglicans argue amongst themselves about what Jesus would do? Next time there’s a crisis in the third world, maybe some of them will feel a twinge of unease as they watch news footage of starving children; the unease will revolve completely about where they may be going in the hereafter, but hey, you have to engage people where they actually live.

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